MIRVAC GROUP MIRVAC REPORT ANNUAL

2015

REPORT

TRUST PROPERTY MIRVAC

MIRVAC GROUP ANNUAL REPORT 2015 2015 REPORT ANNUAL Mirvac Group Annual Report For the year ended 30 June 2015

Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and its controlled entities (including Mirvac Property Trust (ARSN 086 780 645) and its controlled entities). Contents Page

Directors’ report 01 Remuneration report 11 Auditor’s independence declaration 31 Financial statements 32 Directors’ declaration 97 Independent auditor’s report to the members of Mirvac Limited 98 Securityholder information 100 Glossary of acronyms 101 Directory 102

MIRVAC GROUP ANNUAL REPORT 2015 Directors’ report

The Directors of Mirvac Limited present their report, together with the consolidated report of Mirvac Group (“Mirvac” or “Group”) for the year ended 30 June 2015. Mirvac comprises Mirvac Limited (“parent entity” or “company”) and its controlled entities, which includes Mirvac Property Trust (“MPT” or “Trust”) and its controlled entities. Directors The following persons were Directors of Mirvac Limited during the whole of the year and up to the date of this report, unless otherwise stated: — John Mulcahy — Susan Lloyd-Hurwitz — Christine Bartlett (appointed 1 December 2014) — Peter Hawkins — Samantha Mostyn (appointed 1 March 2015) — James M. Millar AM — John Peters — Elana Rubin. Principal activities The principal continuing activities of Mirvac consist of real estate investment, development and investment management. Mirvac has two core divisions: Investment (comprising MPT) and Development (comprising residential and commercial development). There are also two business units, Mirvac Investment Management which comprises third party capital management (Mirvac Capital (“Capital”)); and the property asset management business (Mirvac Asset Management (“MAM”)). Dividends/distributions Dividends/distributions paid to stapled securityholders during the year were as follows: 2015 2014 $m $m

June 2014 half yearly dividends/distributions paid on 28 August 2014: 4.60 cents per stapled security (“CPSS”) 169.8 June 2013 half yearly dividends/distributions paid on 26 July 2013: 4.50 CPSS 164.9 December 2014 half yearly dividends/distributions paid on 26 February 2015: 4.50 CPSS 166.4 December 2013 half yearly dividends/distributions paid on 27 February 2014: 4.40 CPSS 161.3 Total dividends/distributions paid 336.2 326.2

The June 2015 half yearly dividend/distribution of 4.90 CPSS totalling $181.2m is payable on 26 August 2015. Dividends/distributions paid and payable by Mirvac for the year ended 30 June 2015 totalled $347.6m, being 9.40 CPSS (2014: $331.1m — 9.00 CPSS). The payments for the year ended 30 June 2015 and the previous year were distributions made by the Trust. Operating and financial review The statutory profit after tax attributable to the stapled securityholders of Mirvac for the year ended 30 June 2015 was $609.9m (2014: $447.3m). The operating profit (profit before specific non-cash and significant items) was $454.8 (2014: $437.8m) which is within the market guidance provided previously. Operating profit is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash items and significant items. The Directors consider operating profit to reflect the core earnings of the Group. The following table summarises key reconciling items between statutory profit after tax attributable to the stapled securityholders of Mirvac and operating profit. The operating profit information in the table has not been subject to any specific audit procedures by the Group’s auditor but has been extracted from note 1 to the accompanying financial statements for the year ended 30 June 2015, which have been subject to audit; refer to pages 98 and 99 for the auditor’s report on the financial statements.

MIRVAC GROUP ANNUAL REPORT 2015 01 Directors’ report

Operating and financial review / continued 2015 2014 $m $m

Profit attributable to the stapled securityholders of Mirvac 609.9 447. 3 Specific non-cash items Net gain on fair value of investment properties and investment properties under construction (“IPUC”) (140.8) (48.8) Net loss on fair value of derivative financial instruments and associated foreign exchange movements 1 10.0 15.8 Security based payments (“SBP“) expense 2 5.6 6.5 Depreciation of owner-occupied properties (“OOP”) 3 6.1 5.9 Straight-lining of lease revenue 4 (5.3) (12.2) Amortisation of lease fitout incentives 3 9.3 10.3 Net gain on fair value of investment properties, derivatives and other specific non-cash items included in share of net profit of joint ventures and associates (“JVA”) 5 (29.8) (19.6) Significant items Impairment of loans, investments and inventories (0.2) (1.2) Restructuring costs 2, 6 6.8 — Impairment of goodwill — 24.5 Net (gain)/loss from sale of non-aligned assets 7 (16.1) 6.0 Tax effect Tax effect of non-cash and significant adjustments 8 (0.7) 3.3 Operating profit (profit before specific non-cash and significant items) 454.8 437.8

Financial, capital management — restructured the Group’s revolving syndicated bank loan and operational highlights on more favourable terms and reduced the amount of debt maturing in any one year. The facility now totals $1,400.0m Key financial highlights for the year ended 30 June 2015: (June 2014: $1,388.0m), with $200.0m maturing in FY17, — profit attributable to the stapled securityholders of Mirvac $350.0m maturing in FY18, $300.0m maturing in FY19, increased to $609.9m from $447.3m (June 2014); $300.0m maturing in FY20 and $250.0m maturing in FY21; and — operating profit after tax of $454.8m 9 (June 2014: $437.8m), — continued to comfortably meet all debt covenants. representing 12.3 cents per stapled security (“CPSS”); Key operational highlights for the year ended 30 June 2015: — operating cash inflow of $412.7m, which is consistent with 12 the prior year; — acquired $527.0m of key strategic assets in the Investment portfolio, including Birkenhead Point Outlet Centre, Sydney — gearing remained within the Group’s target range of 20.0 NSW and a portfolio of industrial assets from Altis Real Estate 10 to 30.0 per cent at 24.3 per cent ; Equity Partnership Fund No. 1 (“Altis”); — distributions of $347.6m, representing 9.40 CPSS; and — acquired $412.8m of future residential development — net tangible assets (“NTA”) 11 per stapled security of $1.74, projects in key locations, and acquired Leighton up from $1.66 (June 2014). Properties Pty Limited’s 50.0 per cent interest in the Green Square Consortium; Key capital management highlights for the year ended 30 June 2015: — entered into an agreement with unlisted property fund manager ISPT Pty Ltd (“ISPT”) for the sale of a 50.0 per cent — maintained strong liquidity with $539.6m of cash and undrawn interest in 2 Riverside Quay, Melbourne VIC, for a total committed bank facilities held and with no debt maturities consideration of $106.0m 13. ISPT will fund 50.0 per cent of the until September 2016; total development costs throughout the construction period; — reduced average borrowing costs to 5.2 per cent per annum — disposed of seven assets, comprising five office assets and (including margins and line fees), while maintaining weighted two retail assets for a combined total of $406.7m. This follows average debt maturity at 4.3 years; the disposal of seven assets sold to an affiliate of Blackstone Real Estate Asia (“Blackstone”) in July 2014, in addition to a 50.0 per cent interest in 275 Kent Street, Sydney NSW, as outlined in the FY14 Annual Report;

1) Total of Gain and Loss on fair value of derivative financial instruments and Foreign exchange loss in the consolidated statement of comprehensive income (“SoCI”). 2) Included within Employee benefits expenses in the consolidated SoCI. 3) Included within Depreciation and amortisation expenses in the consolidated SoCI. 4) Included within Investment properties rental revenue in the consolidated SoCI. 5) Included within Share of net profit of JVA accounted for using the equity method in the consolidated SoCI. 6) Included within Other expenses in the consolidated SoCI. 7) Included within Net gain on sale of assets in the consolidated SoCI. 8) Included in Income tax expense in the consolidated SoCI. 9) Excludes specific non-cash items, significant items and related taxation. 10) Net debt (at foreign exchange hedged rate) excluding leases/(total tangible assets — cash). 11) NTA per stapled security, based on ordinary securities including Employee Incentive Scheme (“EIS”) securities. 12) Pre-transaction costs. 13) The sale price is calculated on the basis of rents determined under the PwC Agreement for Lease, Wilson and MPT car parking leases, and the target net annual rents for the residual unlet space.

02 MIRVAC GROUP ANNUAL REPORT 2015 Financial, capital management and operational Key operational highlights for Investment for the year ended highlights / continued 30 June 2015: — entered into an exclusive dealing period with financial- — achieved 2.6 per cent like-for-like net operating income growth; services provider, Westpac, to finalise documentation for — maintained high occupancy at 96.5 per cent 8; a new lease agreement at 275 Kent Street, Sydney NSW; — total investment property revaluations provided a net uplift — maintained strong portfolio occupancy of 96.5 per cent of $146.2m 9 (or 2.3 per cent) over the previous book value within the Investment portfolio 1; for the 12 months to 30 June 2015. On a like-for-like basis — leased 127,858 square metres (9.2 per cent of total net (excluding IPUC, acquisitions and disposals), the net uplift lettable area) within the Investment portfolio; was $136.2m (or 2.4 per cent); — settled 2,271 residential lots, in line with target of greater than — acquired Birkenhead Point Outlet Centre, Sydney NSW, 2,200 lots; including an adjoining car parking facility and marina, for a total consideration of $310.0m; — achieved strong levels of residential exchanged pre-sales contracts of $1,987.2m 2; and — acquired a portfolio of four industrial assets from Altis for a total consideration of $213.9m, in line with Mirvac’s — achieved 5.1 Star NABERS average energy rating across the strategy to acquire quality assets in key locations; office portfolio. — disposed of seven assets, comprising five office assets Outlook 3 and two retail assets, for a combined total of $406.7m. Momentum in Australia’s property markets continues to This follows the disposal of seven assets which were sold be divergent across sector and geography, as the economy to Blackstone in July 2014, in addition to a 50.0 per cent continues to rebalance away from very strong levels of mining- interest in 275 Kent Street, Sydney NSW, as outlined in the led growth. Low interest rates are expected to remain supportive FY14 Annual Report; over FY16, and together with a projected low Australian dollar, — entered into an exclusive dealing period with Westpac economic growth is expected to gradually improve, remaining to finalise documentation for a new lease agreement strongest in New South Wales and Victoria. Mirvac’s deliberate at 275 Kent Street, Sydney NSW; weighting to New South Wales and Victoria means that it is — completed 437 leasing deals over 127,858 square metres of well positioned to perform across business cycles. Mirvac’s net lettable area (9.2 per cent of total net lettable area); and mix of passive and active capital will also ensure it continues to provide stable income and growth to the Group. — key development highlights are outlined in the Commercial highlights section in this report. Key leasing achievements Mirvac will remain focused on prudently managing its capital for assets under development included: position by monitoring and accessing diversified sources of > 200 George Street, Sydney NSW: increased pre-leasing capital, including equity, domestic and international debt and to 81.0 per cent following the announcement that wholesale capital. This focus will help to ensure Mirvac can Mirvac would relocate its Sydney head office to this new continue to meet its strategic objectives without increasing commercial development. Mirvac will occupy 5,703 square its overall capital management risk profile. metres across five floors of the tower for a ten-year term. Divisional highlights Anchor tenant, EY, has pre-committed to approximately Investment 66.0 per cent of office space; At 30 June 2015, Investment (comprising MPT and a small > Orion Springfield Central, Springfield QLD: progressed number of assets held by the Company) had $7,517.7m 4 invested with the leasing of the Stage 2 expansion of approximately capital across 59 5 direct property assets, covering the office, 32,000 square metres, with 75.2 per cent 10 leased (up from retail and industrial sectors, as well as investments in car parks, 59.2 per cent at 30 June 2014); a hotel and other funds managed by Mirvac. > Harold Park Tramsheds, Sydney NSW: progressed with The split of invested capital across each sector was: leasing for over 6,000 square metres of retail space, which will include a supermarket, market style food halls, — office: 54.6 per cent; boutique retailers, cafés, restaurants and a gymnasium — retail: 28.5 per cent; on completion. The project was 58.7 per cent leased — industrial: 8.8 per cent; and as at 30 June 2015; and — other: 8.1 per cent 6. > Stanhope Village, Stanhope Gardens NSW: achieved practical completion of the Stage 4 expansion in For the 12 months to 30 June 2015, Investment’s statutory profit March 2015, ahead of schedule and 100.0 per cent before tax was $593.2m (June 2014: $438.1m), driven by an uplift leased on completion. in property revaluations, and its operating profit before tax was $418.3m, supported by acquisitions and lower borrowing costs, offset by the disposal of assets and a 50.0 per cent interest in 275 Kent Street, Sydney at the beginning of the financial year. Investment’s earnings continued to be secured by a strong weighted average lease expiry (“WALE”) profile of 4.5 years 7, 92.8 per cent of FY15 rent reviews being linked or fixed to the Consumer Price Index (“CPI”), and 65.7 per cent of revenue being derived from multinational, ASX listed and government tenants.

1) By area, excludes indirect property investments, and includes 8 Chifley Square, Sydney NSW. 2) Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds. 3) These future looking statements should be read in conjunction with future releases to the ASX. 4) Includes IPUC, indirect property investments and 8 Chifley Square, Sydney NSW. 5) Includes 8 Chifley Square, Sydney NSW. Although not a direct property asset, it is treated as an investment accounted for using the equity method for statutory reporting. 6) Includes IPUC, indirect property investments, car park assets and hotel. 7) By income, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments. 8) By area, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments. 9) After adjustment for OOP, the net uplift was $140.8m, including IPUC. 10) As at 31 July 2015.

MIRVAC GROUP ANNUAL REPORT 2015 03 Directors’ report

Divisional highlights / continued For the year ended 30 June 2015, MIM recorded a statutory profit The Group demonstrated its ability to create world-class, before tax of $5.1m (June 2014: $5.8m) and an operating profit sustainable workplaces through a continued focus on before tax of $4.5m. sustainability, with key highlights including: At 30 June 2015, Capital managed three wholesale funds: Mirvac — a 5.1 Star NABERS average energy rating across the Wholesale Residential Development Partnership, Tucker Box office portfolio; Hotel Group and JF Infrastructure Yield Fund; as well as two — 8 Chifley Square, Sydney NSW achieved a 6 Star Green Star retail funds: Mirvac Development Fund — Seascapes and Mirvac As‑Built v2 rating; Development Fund — Meadow Springs. — 200 George Street, Sydney NSW awarded a 6 Star Green Star Capital also acted as investment manager for the Australian — Office Design v3 rating; Office Alliance (“Alliance”). The initial asset in the Alliance, — 23 Furzer Street, Phillip ACT achieved the first 6.0 Star 699 Bourke Street, Melbourne, reached practical completion NABERS energy rating for a major office building without in April 2015 and is 100.0 per cent leased to AGL. the use of GreenPower. The property has reduced energy Prior to 3 December 2014, MIM was also responsible for the consumption by 32.4 per cent since 2011. The asset boasts ASX listed Mirvac Industrial Trust (ASX: MIX). On 3 December Mirvac’s first large scale solar photovoltaic system, with 2014, Mirvac announced that all MIX units were transferred to an 80 kilowatt solar array, which will see a reduction of AustFunding Pty Limited, a subsidiary of the Goldman Sachs approximately 100 tonnes of greenhouse gas emissions per Group Inc., as part of the Scheme Implementation Agreement annum; and that was entered into on 19 September 2014. — received the NSW Green Globes 10-year Sustainability Award for demonstrating long-term environmental achievements MAM provides asset management services primarily for the and successful program delivery and outcomes between MPT portfolio. MAM currently manages 61 properties. 2004 and 2014. Outlook 1 Outlook 1 Capital remains focused on establishing investment partnerships Global economic activity continues to be mixed, with conditions with strategically aligned domestic and international continuing to improve in the US, sluggish improvement in institutional investors to coinvest alongside Mirvac in office, Europe and Japan and cooling growth in China. Domestically, industrial, retail and residential assets and development the economy has recorded slightly below-trend growth, projects. MAM will also continue to provide asset management impacted by significant falls in commodity prices and a services in accordance with growth in the MPT and Capital slow‑down of investment in the resource sector. However, a low portfolios and in assets owned by third parties where there Australian dollar, a sustained period of low interest rates and are common interests. strong investor demand for prime assets are providing support Development for activity in the office, retail and industrial sectors. The office Mirvac’s Development business unit operates across portfolio, with a solid occupancy, embedded rental increases, national product lines consisting of Residential (comprising quality tenant covenants and a strong weighting to Australia’s Masterplanned Communities and Apartments) and Commercial. largest office markets, Sydney and Melbourne, continues to be well positioned. Conditions in the retail sector have been At 30 June 2015, Development had $1,579.3m of invested capital. divergent throughout Australia, with mixed levels of consumer For the year ended 30 June 2015, Development’s statutory confidence and soft household income growth. Despite this, profit before tax was $126.6m (June 2014: $112.0m) and its Mirvac’s retail assets, predominantly situated in metropolitan operating profit before tax was $126.6m. locations, should continue to benefit from their exposure to solid catchments in urban markets, particularly Sydney where Residential 67.3 per cent 2 of the portfolio is located and where retail sales The business unit continued to deliver quality residential have been robust. Tenant demand for industrial assets in New product in the Group’s core metropolitan markets, with new South Wales has been moderate over the past year and broadly release projects targeted at the right price points and right meeting the levels of new supply. The industrial portfolio, with locations. Key highlights across Masterplanned Communities minimal vacancy and a long WALE of 7.6 years 3, continues to and Apartments: provide steady income to the Group. Masterplanned Communities Overall, the Investment remains focused on providing secure — Elizabeth Hills and Elizabeth Point NSW: 100.0 per cent of passive income to the Group, with key areas of focus including: released lots sold across both projects; — improving the quality of the portfolio via non-aligned asset — Alex Avenue NSW: continued strong sales with 83.4 per sales and creating new product to be held for the long term; cent of released lots pre-sold (267 settled and exchanged — extracting the benefit of the Group’s demonstrated contracts); competitive advantage in the office sector by creating — Googong NSW: continued strong sales with 93.1 per cent of innovative, collaborative and flexible workplaces for the future; released lots pre-sold (944 settled and exchanged contracts); — maintaining a focus on the key markets of Sydney and — Tullamore, Doncaster VIC: achieved strong sales with 96.9 Melbourne in the office and industrial sectors; and per cent of released lots pre-sold (189 exchanged contracts); — focusing on quality retail assets located in key urban markets — Woodlea, Rockbank VIC: achieved strong sales with 100.0 and unlocking value through the retail development pipeline. per cent of released lots pre-sold (265 exchanged contracts); Investment Management — Jack Road, Cheltenham VIC: achieved strong sales with 87.0 Mirvac Investment Management (“MIM”) comprises two business per cent of released lots pre-sold (47 exchanged contracts); activities for segment reporting purposes, including third party — Harcrest, Melbourne VIC: continued strong sales with 99.6 per capital management (Mirvac Capital (“Capital”)) and property cent of total released lots sold (815 exchanged contracts); and asset management (Mirvac Asset Management (“MAM”)). — Greystone Terraces, Everton Park QLD: achieved solid sales with 58.3 per cent of released lots pre-sold (21 exchanged contracts).

1) These future looking statements should be read in conjunction with future releases to the ASX. 2) By book value. 3) By income.

04 MIRVAC GROUP ANNUAL REPORT 2015 Divisional highlights / continued State based lot settlements by product for the year ended Apartments 30 June 2015 were as follows: — Bondi, Sydney NSW: achieved strong sales with 100.0 per cent Masterplanned of 190 total lots pre-sold; State Communities Apartments Total — Green Square, Sydney NSW: achieved strong sales with 100.0 per cent of Stage 1, Ebsworth and Stage 2, Ebsworth NSW 770 482 1,252 No.8 pre‑sold (174 and 64 exchanged contracts respectively), QLD 252 13 265 and 98.9 per cent of Ovo pre-sold (221 exchanged contracts); VIC 186 184 370 — Harold Park, Sydney NSW: achieved strong sales with WA 375 9 384 65.7 per cent of the first release of the final stage, Vance, Total 1,583 688 2,271 pre‑sold (71 exchanged contracts); — Yarra’s Edge, Docklands VIC: commenced construction on Commercial Forge apartments and Wharf’s Entrance terraces following Mirvac’s commercial development activities include office, pre-sales of 63.2 per cent (144 exchanged contracts) and retail and industrial projects. For the year ended 30 June 2015, 83.3 per cent (15 exchanged contracts) respectively; Mirvac’s office development pipeline had an end value — Waterfront, Unison QLD: achieved 83.3 per cent of pre-sales of $3,223.3m on a 100.0 per cent ownership basis. for Stage 1 (120 exchanged contracts) with construction Key leasing highlights for Commercial for the year ended progressing to schedule, and achieved 71.2 per cent of 30 June 2015 were outlined in the Investment highlights pre‑sales for Stage 2 (104 exchanged contracts), with early section of this Report. Key development milestones were: construction works currently underway; and — 200 George Street, Sydney NSW: demolition and excavation — Art House, South Brisbane QLD: secured 78.2 per cent pre‑sales works complete with the concrete core at Level 36 and the for Stage 1 (147 exchanged contracts), with construction concrete slabs at Level 32. The project remains on track, commencing in July 2015. with completion expected in FY16. The office tower has In addition to the strong sales momentum, Mirvac completed been awarded a 6.0 Star Green Star — Office Design v3 rating, the englobo sale of provisioned projects Precinct 8 at and is targeting a 5.0 Star NABERS energy rating and a Gainsborough Green, QLD and a portion of Glenfield Panorama. 6.0 Star Green Star rating; — 699 Bourke Street, Melbourne VIC: reached practical For the year ended 30 June 2015, Development’s residential completion in April 2015, with fit-out works complete and pipeline totalled 33,064 lots which was supplemented by the major tenant, AGL, moving into the building in June 2015. acquisition of a number of key projects that will contribute The A-grade building with premium-grade services has significantly to Development’s future earnings, including: achieved a 6.0 Star Green Star — Office Design v2 rating, — Greenbank QLD: acquisition of a masterplanned community demonstrating world leadership in sustainable design, site in Brisbane’s south-west growth corridor with the and is targeting a 5.0 Star NABERS energy rating; potential to deliver approximately 3,300 lots; — 2 Riverside Quay, Melbourne VIC: commenced construction — Marsden Park North NSW: entered into a project delivery in July 2014, with completion expected in FY17. A 5.0 Stars agreement to develop a masterplanned community site NABERS energy rating and a 5.0 Star Green Star Office within Sydney’s north-west growth centre, with the potential Design rating are being targeted; to deliver over 1,200 lots; — Treasury Building, Perth WA: completed the structural core for — Gledswood Hills NSW: acquisition of a masterplanned the final level of the building in March 2015, with completion community site with the potential to deliver approximately anticipated for the first half of FY16. The A-grade office tower 570 lots; located on the landmark site of the Old Treasury building is — St Leonards, Sydney NSW: acquisition of a mixed-use expected to achieve a 4.5 Star NABERS energy rating and development site in Sydney’s North Shore, with the potential 5.0 Star Green Star rating; for approximately 500 apartments and approximately 7,500 — Orion Springfield Central, Springfield QLD: construction square metres of commercial space; progressed on the Stage 2 expansion, which will add — Sydney Olympic Park, Homebush NSW: entered into a project approximately 32,000 square metres. The project will delivery agreement to develop an apartment site in Sydney’s introduce a Coles, Target, Event Cinemas and additional iconic Olympic Park precinct, with the potential to deliver specialty stores and commercial suites to an expanded town over 400 lots; centre, and is due for completion in the second half of FY16; — Claremont on the Park, Claremont WA: acquisition of an — Harold Park Tramsheds, Sydney NSW: commenced apartment site in the urban renewal area of Claremont Oval, construction in November 2014 for over 6,000 square metres with the potential to deliver approximately 230 lots; of retail space, which will include a supermarket, market — Georges Cove Marina, Moorebank NSW: entered into a project style food halls, boutique retailers, cafés, restaurants and a delivery agreement to develop a masterplanned community gymnasium on completion. Mirvac has dedicated 500 square site located within Sydney’s south-west growth precinct with metres of community space to Sydney Council on completion, the potential to deliver approximately 180 homes; due in the second half of FY16; — Jack Road, Cheltenham VIC: acquisition of a masterplanned — Stanhope Village, Stanhope Gardens NSW: achieved practical community site in the bayside suburb of Cheltenham, with the completion of the Stage 4 expansion in March 2015 ; and potential to deliver approximately 180 lots; and — Kawana Shopping World, Buddina QLD: achieved practical — Darien Street, Bridgeman Downs QLD: acquisition of a completion of Stage 4 in July 2014, incorporating a new masterplanned community site with the potential to deliver ALDI supermarket and over 60 specialty stores, expanding approximately 120 land lots. the centre by approximately 9,000 square metres. For the year ended 30 June 2015, Development settled 2,271 residential lots and had secured future income of $1,987.2m 1 through residential exchange pre-sales contracts.

1) Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds.

MIRVAC GROUP ANNUAL REPORT 2015 05 Directors’ report

Divisional highlights / continued Divisional risks Outlook 1 At a divisional level, the key risks faced which have the potential The outlook for capital city residential markets remains mixed to affect the achievement of the financial prospects for the by location, however, a sustained low interest rate environment Group include: remains supportive for all markets. Construction of new — Office:as detailed in the outlook section for Investment, dwellings is generally running at a strong pace in the major demand for office space remains challenging across the capital cities, although concentration is divergent by location. markets in which the Group operates. This has the potential All major states have recorded solid levels of population to impact on the Group’s performance given that office assets growth, although this has slowed from a very strong pace represent 54.6 per cent 2 of the Investment portfolio. The in Queensland and Western Australia. New South Wales, office portfolio, comprising solid occupancy of 94.0 per cent 3, and Sydney in particular, is benefiting from stronger levels a WALE of 4.3 years 4 and like-for-like rent growth of 2.6 per of population and economic growth over the past three years. cent, demonstrates Mirvac’s ability to maintain a strong and Demand for modern, higher density living supported by amenity robust portfolio through the cycles of demand. The Group and infrastructure is expected to continue, particularly in the seeks to manage uncertainty around commercial office south‑eastern states. demand in a number of ways including substantial pre-letting of commercial developments in advance of construction, and Development remains focused on: by partially selling down commercial developments in advance — continuing to improve key metrics including return of completion; on invested capital (targeting 12.0 per cent by FY17) — Retail: as detailed in the outlook section for Investment, and maintaining solid gross margins; retail sales growth was divergent throughout Australia — strategically restocking the development pipeline with in FY15. Despite encouraging signs in some markets, the focus and discipline; impact of recent below-trend retail sales growth has placed — maintaining a high level of pre-sales to mitigate future pressure on retailers. With 28.5 per cent of MPT’s portfolio earning risks; and represented by retail assets, Mirvac is focused on continually — delivering the $3.2 billion commercial development pipeline. refreshing its retail assets (via refurbishment, redevelopment or tenant remixing) to adapt to changing market dynamics. Risks Furthermore, Mirvac maintains a focus on key metropolitan As a property group involved in real estate investment, markets, and a diversified tenancy mix, where no single residential and commercial development and investment specialty retailer contributes greater than 1.6 per cent management, Mirvac faces a number of risks throughout of the total portfolio’s gross rent; the business cycle which have the potential to affect the — Industrial: as detailed in the outlook section for Investment, Group’s achievement of its targeted financial outcomes. continuing investor demand for prime-grade industrial assets The Group’s objective is to ensure those risks are identified in key locations is resulting in compressed capitalisation and appropriate strategies are implemented to control or rates, weighting predominately towards the stronger markets otherwise manage the impact of those risks. Mirvac’s risk of Sydney and Melbourne. Mirvac continues to focus on management framework is integrated with its day‑to‑day properties with long lease terms and secure cash flow profiles business processes and is supported by a dedicated that will benefit from the increase in investor demand and Group Risk function. Further information on the Group’s continue to provide steady returns; and risk management framework is detailed in the Corporate — Residential: as detailed in the outlook section for Governance statement which is available on Mirvac’s website: Development, Australia’s residential market varies from www.mirvac.com/about/corporate-governance. state to state (and within states) with growth in some Group risks markets expected to eclipse a more moderate performance For the year ended 30 June 2015, the Group continued in others. Despite the breadth of market, the Development to review both internal and external risks which have the division remains focused on the right product in the right potential to affect the Group’s targeted financial outcomes location, diversifying risk across residential sub‑markets, and to implement strategies to minimise their impact. Further across Australia and between Masterplanned Communities information on the material risks identified for each of the and Apartments. Weighting to key growth markets such as sectors is outlined below. At a Group level, Mirvac faces certain New South Wales further mitigates this risk, as do pre-sales. risks to achieving of its financial outcomes; these risks are the types of risks typical for an Australian property group. These may include debt refinancing and compliance with debt covenants, compliance with health, safety and environment regulations as well as broader economic conditions.

1) These future looking statements should be read in conjunction with future releases to the ASX. 2) By invested capital within the Investment division. This includes 472 Pacific Highway and 486 Pacific Highway, St Leonards NSW. Excluding these office assets, the office portfolio represents 53.9 per cent of the Investment portfolio. 3) By area, includes 8 Chifley Square, Sydney NSW. 4) By income, includes 8 Chifley Square, Sydney NSW.

06 MIRVAC GROUP ANNUAL REPORT 2015 Environmental regulations Mirvac and its business operations are subject to compliance with both Federal and state environment protection legislation, and the Board is satisfied that adequate systems are in place for Mirvac’s compliance with the applicable legislation. Within Mirvac’s health, safety and environment performance reporting systems, including internal and external audits and inspections, Mirvac has not experienced any incidents that have resulted in any significant harm to the environment. There have been no infringement notices issued for minor environmental incidents during the reporting period. A key initiative to reduce greenhouse gas emissions was a commitment to achieve an average 4.7 Star NABERS Energy rating on applicable office buildings by July 2014. The Investment division achieved this target in December 2013, with the office portfolio now achieving 5.1 Stars. This has resulted in reduced operating costs, improved environmental performance, demonstrating excellent energy operational and management practices, and high efficiency systems and equipment. The new Mirvac sustainability strategy, ‘This Changes Everything’, sets short term targets for the whole portfolio to reduce carbon emissions by 20 per cent and increase energy generation to 1MW by 2018. This plan also includes a long term mission to be Net Positive for energy and water by 2030, whilst achieving zero waste to landfill in the same period. Mirvac is required under the National Greenhouse and Energy Reporting Act 2007 to report annually on greenhouse gas emissions, reductions, removals and offsets, and energy consumption and production figures. The Federal Government has introduced into Parliament legislation that terminates the Energy Efficiency Opportunities Program and so removes the mandatory requirement for large energy using businesses to assess opportunities to improve energy efficiency and to report publicly on the outcomes of those assessments. The Federal Government has recently repealed the carbon tax, we will thereby approximately reduce our energy bill by 10.0 per cent. The carbon tax will be replaced by direct action, details of which are still being finalised. Mirvac is also subject to the commercial Building Energy Efficiency Disclosure Act 2010. This involves the disclosure of energy efficiency-related information at the point of sale or lease of office space greater than 2,000 square metres.

MIRVAC GROUP ANNUAL REPORT 2015 07 Directors’ report

John Mulcahy Susan Lloyd-Hurwitz Christine Bartlett Peter Hawkins

Information on Directors Christine Bartlett Directors’ experience and areas of special responsibilities BSc, MAICD The members of the Mirvac Board and their qualifications, Independent Non-Executive experience and responsibilities are set out below: Member of the Audit, Risk and Compliance Committee John Mulcahy Christine was appointed a Non-Executive Director of Mirvac PhD (Civil Engineering), FIEAust, MAICD on 1 December 2014. She is currently a Non-Executive Independent Non‑Executive Chair Director of GBST Holdings Ltd (appointed June 2015) and Chair of the Nomination Committee a Director of The Smith Family. Christine is a member of Member of the Audit, Risk and Compliance Committee the Minter Ellison Advisory Council, the UNSW Australian Member of the Human Resources Committee School of Business Advisory Council and the Australian Institute of Company Directors. Previously she has been a John Mulcahy was appointed a Non-Executive Director of Mirvac director of PropertyLook, National Nominees Ltd and Deputy on 19 November 2009 and the Independent Non-Executive Chairman of the Australian Custodial Services Association. Chair on 14 November 2013. John has more than 28 years of leadership experience in financial services and property Christine is an experienced CEO and senior executive with investment. John is the former Managing Director and Chief extensive line management experience gained through Executive Officer of Suncorp-Metway Limited. Prior to joining roles with IBM, Jones Lang LaSalle and National Australia Suncorp-Metway, John held a number of senior executive roles Bank Limited. Her executive career has included Australian, at Commonwealth Bank, including Group Executive, Investment regional and global responsibilities based in Australia, the and Insurance Services. He also held a number of senior roles USA and Japan. Christine brings a commercial perspective during his 14 years at Lend Lease Corporation, including Chief especially in the areas of financial discipline, identifying risk, Executive Officer, Lend Lease Property Investment and Chief complex project management, execution of strategy, fostering Executive Officer, Civil and Civic. innovation and taking advantage of new emerging technologies. John is currently a Non-Executive Director of ALS Limited Christine holds a Bachelor of Science from the University (formerly Campbell Brothers Limited) (appointed February of Sydney and has completed senior executive management 2012), Coffey International Limited (appointed September programs at INSEAD. 2009 and as Chair in November 2010) and GWA Group Limited Peter Hawkins (appointed November 2010). John is also a Director of The Shore BCA (Hons), FAICD, SFFin, FAIM, ACA (NZ) Foundation Limited and the Great Barrier Reef Foundation and Independent Non‑Executive a former Guardian of the Future Fund Board of Guardians (2006 until April 2015). Chair of the Human Resources Committee Member of the Audit, Risk and Compliance Committee Susan Lloyd-Hurwitz Member of the Nomination Committee BA (Hons), MBA (Dist) Chief Executive Officer & Managing Director (“CEO/MD”) Peter Hawkins was appointed a Non-Executive Director of Mirvac Executive on 19 January 2006, following his retirement from ANZ after a career of 34 years. Prior to his retirement, Peter was Group Susan Lloyd-Hurwitz was appointed CEO/MD on 15 August Managing Director, Group Strategic Development, responsible 2012 and a Director of Mirvac Board on 5 November 2012. for the expansion and shaping of ANZ’s businesses, mergers, Prior to this appointment, Susan was Managing Director at acquisitions and divestments and for overseeing its strategic LaSalle Investment Management, where she was responsible cost agenda. for the core investment accounts and funds business lines in the European region, as well as the operation of the business. Peter was a member of ANZ’s Group Leadership Team and sat Susan has also held senior executive positions at MGPA, on the boards of Esanda Limited, ING Australia Limited and Macquarie Group and Lend Lease Corporation, working ING (NZ) Limited, the funds management and life insurance in Australia, the US and Europe. joint ventures between ANZ and ING Group. He was previously Group Managing Director, Personal Financial Services, as well Susan has been involved in the real estate funds management as holding a number of other senior positions during his career industry for over 25 years, with extensive experience in fund and with ANZ. Peter was also a Director of BHP (NZ) Steel Limited portfolio management in both the direct and indirect markets, from 1990 to 1991 and Visa Inc. from 2008 to 2011. fund development, mergers and acquisitions, dispositions, research and business strategy. Peter is currently a Non-Executive Director of Westpac Banking Corporation (appointed December 2008), MG Responsible Entity Susan is also President of INSEAD Australasian Council, Limited, the responsible entity for MG Unit Trust (appointed April a Director of the Green Building Council of Australia and 2015 and listed in July 2015), Murray Goulburn Co-operative Co. a member of the UWS Foundation Council which supports Limited, Clayton Utz and Liberty Financial Pty Ltd, and a former the University of Western Sydney in its development and Non-Executive Director of Treasury Corporation of Victoria. contribution to Greater Western Sydney.

08 MIRVAC GROUP ANNUAL REPORT 2015 James M. Millar AM Samantha Mostyn John Peters Elana Rubin

Information on Directors / continued John Peters James M. Millar AM BArch, AdvDipBCM, GAICD BCom, FCA, FAICD Independent Non-Executive Independent Non-Executive Member of the Human Resources Committee Chair of the Audit, Risk and Compliance Committee John Peters was appointed a Non-Executive Director of Mirvac Member of the Nomination Committee on 17 November 2011. James M. Millar was appointed a Non-Executive Director of John brings to the Board over 40 years’ experience in Mirvac on 19 November 2009. He is the former Chief Executive architectural design, project management, property Officer of Ernst & Young (“EY”) in the Oceania Region, and was development and property management. a director on their global board. For the last 20 years, John has been the principal of a private James commenced his career in the Insolvency & property development company focused on substantial Reconstruction practice at EY, conducting some of the largest mixed use developments and redevelopments in South East corporate workouts of the early 1990s. He has qualifications Queensland. During this period, he has also consulted to various in both business and accounting. investors and other financial stakeholders in several Queensland James is a Non-Executive Director of Fairfax Media Limited development projects. (appointed July 2012), Helloworld Limited (appointed Prior to this, John was with Lend Lease Corporation for 14 years, September 2010) and Macquarie Radio Network Limited where he was Queensland Manager Lend Lease Development, (appointed April 2015). He is Chair of both the Export Finance and Director, Lend Lease Commercial. and Insurance Corporation (appointed December 2014) and Forestry Corporation NSW (appointed March 2013). Elana Rubin BA (Hons), MA, FFin, FAICD, FAIM James serves a number of charities where he is the Chair Independent Non-Executive of The Smith Family, and is a Trustee of the Australian Cancer Research Foundation and the Vincent Fairfax Family Member of the Audit, Risk and Compliance Committee Foundation. He is a former Chair of Fantastic Holdings Limited Member of the Nomination Committee (from May 2012 until June 2014). Elana Rubin was appointed a Non-Executive Director of Mirvac Samantha Mostyn on 11 November 2010 and has extensive experience in property BA, LLB and financial services. Elana is a Director of several NAB life Independent Non-Executive insurance and asset management subsidiaries and a Director of Touchcorp Limited (appointed January 2015), Transurban Member of the Human Resources Committee Queensland (previously Queensland Motorways Holding Pty Samantha Mostyn was appointed a Non-Executive Director of Limited) and the Victorian Funds Management Corporation. Mirvac on 1 March 2015. Samantha is a Non-Executive Director She is also a member of the Qualitas Properties Advisory Board, and corporate advisor and is currently a Non-Executive Director Committee for Melbourne and the Victorian Council of the of Virgin Australia Holdings Limited (appointed September Australian Institute of Company Directors. 2010), Transurban Holdings Limited (appointed December 2010) Elana is the former Chair of AustralianSuper (July 2007 to and Cover-More Group Limited (appointed December 2013). April 2013), one of Australia’s leading superannuation funds, She is also a Director on an Australian APRA regulated Citibank having been on the board since 2006. She was a Director of Subsidiary Board. Samantha also serves on the Climate Council, Victorian WorkCover Authority (December 2001 to February Climate Works Australia, the Advisory Board of the Crawford 2012) and Chair from 2006. She was also a Director of Mirvac School of Government and Economics at the Australian National Funds Management Limited, the responsible entity and trustee University and is the President of the Australian Council for for Mirvac’s listed and unlisted funds, from November 2013 to International Development. She is Deputy Chair of the Diversity February 2015. Council of Australia, and has served as an AFL Commissioner since 2005. Her other current board appointments include Elana was previously a Non-Executive Director of TAL Life Limited the Australia Council for the Arts, Australian Volunteers (formerly Tower Australia Limited) (from November 2007 to April International, the GO Foundation and Carriageworks. 2013) and has been a Director on a number of listed companies and other entities including Bravura Solutions Ltd. Elana is a Previously, Samantha has served as a Director of the Sydney former member of the Federal Government’s Infrastructure Theatre Company, a Commissioner with the National Mental Australia Council (from May 2011 to September 2014). Health Commission, and has held senior executive positions at IAG, Optus and Cable & Wireless Plc.

MIRVAC GROUP ANNUAL REPORT 2015 09 Directors’ report

Information on Directors / continued Company Secretaries Sean Ward Natalie Allen (resigned 26 June 2015) BEc, BComm, FGIA, FFin BEc, LLB, GAICD Sean Ward was appointed Company Secretary on 23 August 2013. Natalie Allen was appointed Company Secretary on 21 January Sean joined Mirvac as Group Company Secretary in April 2013 2013. Natalie joined Mirvac as Group General Counsel in and has more than 15 years’ corporate experience. Prior to August 2012, and has more than 16 years of legal experience joining Mirvac, Sean was the Head of Subsidiaries at Westpac in real estate and equity capital markets. Prior to joining Mirvac, Banking Corporation, providing company secretarial support Natalie was the Group General Counsel and Company Secretary for all of Westpac’s listed and unlisted entities and before this at Charter Hall Group, and before this was General Counsel was a Senior Companies Advisor at ASX Limited. Sean is also and Company Secretary for a number of listed and unlisted currently studying for a Master of Business Administration entities within Macquarie’s Real Estate Funds division. Natalie with the Australian Graduate School of Management. is a solicitor of the Supreme Court of NSW, a member of the State Bar of California and a graduate of the Australian Institute of Company Directors. Natalie resigned as Company Secretary on 26 June 2015.

Meetings of Directors The number of meetings of the Board of Directors and of each standing Board committee, of which the relevant Director was a member, held during the year ended 30 June 2015 and the number of meetings attended by each Director are detailed below: Audit, Risk and Human Compliance Resources Board Committee Committee Nomination Board Committee 1 (“ARCC”) (“HRC”) Committee Director A B A B A B A B A B

John Mulcahy 15 15 2 2 6 6 5 5 2 2 Susan Lloyd-Hurwitz 15 15 3 3 — — — — — — Christine Bartlett 2 9 9 — — 4 4 — — — — Peter Hawkins 15 15 — — 6 6 5 5 2 2 Samantha Mostyn 3 5 5 — — — — 2 2 — — James M. Millar AM 14 15 — — 6 6 3 3 2 2 John Peters 15 15 1 1 2 2 2 2 — — Elana Rubin 4 13 13 — — 6 6 — — 2 2

1) Committees of the Board established to deal with particular purposes during the year. 2) Christine Bartlett was appointed as a Director on 1 December 2014. 3) Samantha Mostyn was appointed as a Director on 1 March 2015. 4) Elana Rubin did not attend two Board meetings due to a potential conflict of interest. A) Indicates the number of meetings attended during the period the Director was a member of the Board or Committee. B) Indicates the number of meetings held during the period the Director was a member of the Board or Committee (excluding meetings not attended due to a potential conflict of interest).

10 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report Contents Page

1 Introduction — key questions 11 2 Who is covered by this report 12 3 Summary of FY15 remuneration 13 4 Our people 13 5 Our remuneration strategy and the link to business strategy 14 6 Actual remuneration earned in FY15 15 7 Executive KMP remuneration at Mirvac 16 8 Business and executive remuneration outcomes 16 9 Mirvac’s approach to executive remuneration 19 10 How remuneration is structured 20 11 LTI grants in FY15 23 12 Total remuneration in FY15 24 13 Service agreements for the Executive KMP 24 14 Non-Executive Directors’ remuneration 24 15 Legacy remuneration arrangements 26 16 Additional required disclosures 26 Please see page 29 for definitions of terms used in this remuneration report.

1 Introduction — key questions Key questions Mirvac approach Further info Remuneration in 2015 1) How is Mirvac’s Mirvac’s remuneration outcomes are strongly linked to the delivery of sustainable Section 5 performance securityholder value over the short and long term. Increased corporate earnings Page 14 reflected in this year’s and high performance across non-financial measures have resulted in above target remuneration outcomes? performance on our balanced scorecard and a corresponding higher than usual payout of short-term incentives (“STI”). However, vesting of our long-term incentive (“LTI”) awards will be substantially lower than in FY14, largely as a result of impairment losses in our residential property business during FY13 which reduced our return on equity. The LTI outcome reflects our commitment to ensuring executives’ remuneration reflects the achievement of sustainable value for securityholders. 2) What changes have been The only changes to our remuneration approach this year were to increase the Section 14 made to the remuneration Non‑Executive Director (“NED”) fee pool (as approved by securityholders at the Page 24 structure in FY15? 2014 AGM) and to simplify the fee structure for Non-Executive Directors. Individual NED fee levels remain in line with FY14. No changes have been made to the executive remuneration structure. 3) Are any changes The only change planned for FY16 is an increase to the threshold and stretch Section 10 planned for FY16? performance levels for LTI awards. The threshold level for ROIC is proposed to rise Page 20 from 7.5 per cent to 8 per cent, and the stretch from 9 per cent to 10 per cent. The increase reflects Mirvac’s expectations for returns through the cycle, and over the longer term. The TSR measure for LTI awards remains unchanged. Remuneration framework 4) Where does Mirvac’s Fixed and variable pay are both aimed at the market median, with remuneration Section 9 remuneration sit opportunities for outstanding performance extending up to the 75th percentile Page 19 against the market? of the market. 5) What proportion of The majority of Executive KMP’s remuneration is based on performance, and is Section 7 remuneration is “at risk”? therefore at risk. Page 16 6) Are there any clawback Yes. If there is a material financial misstatement, any unvested LTI or deferred STI Section 10 provisions for incentives? awards can be clawed back. Page 20 7) What is Mirvac’s The CEO/MD must maintain a minimum securityholding of 100 per cent of fixed Section 9 minimum securityholding remuneration. Other Executives must hold 50 per cent of their fixed remuneration. Page 19, requirement? Non-Executive Directors must hold 25,000 securities. Section 14 Page 24 Short-term incentives (“STI”) 8) Are any STI payments Yes, 25 per cent of STIs are awarded as rights over Mirvac securities, half of which vest Section 7 deferred? in one year and half in two years. If the Executive leaves Mirvac before the vesting Page 16 period ends, the rights do not vest and are cancelled. 9) Are STI payments Yes, an Executive can earn a maximum of double their STI target. Section 10 capped? Page 20

MIRVAC GROUP ANNUAL REPORT 2015 11 Directors’ report

Remuneration report / continued Key questions Mirvac approach Further info Long-term incentives (“LTI”) 10) What are the performance Half of the LTI awards are based on relative TSR. The other half was based on Section 10 measures that determine ROE for the FY13 LTI award, and ROIC for awards made in subsequent years. Page 20 if the LTI grants vest? 11) Does the LTI have No, there is no re-testing. Section 10 re‑testing? Page 20 12) Are dividends/ No dividends/distributions are paid on unvested LTI awards. This ensures that Section 10 distributions paid on Executives are only rewarded when performance hurdles have been achieved Page 20 unvested LTI awards? at the end of the performance period. 13) Is the size of LTI grants No. LTI grant amounts are not increased to reflect the performance conditions Section 10 increased in light of necessary for vesting. Page 20 performance conditions? 14) Can LTI participants No. Section 10 hedge their unvested LTI? Page 20 15) Does Mirvac buy For deferred STI awards, securities are purchased on-market. For LTI awards, Section 10 securities or issue the Board decides whether to issue new securities or buy them on-market. Page 20 new securities for share‑based awards? 16) Does Mirvac issue No. share options? Executive agreements 17) What’s the maximum an Executive KMP termination entitlements are limited to 12 months’ fixed remuneration. Section 13 executive can receive Page 24 on termination?

2 Who is covered by this report? This report covers the key management personnel (“KMP”) of Mirvac, who are the people responsible for determining and executing Mirvac’s strategy. This includes both the Executive KMP (including the CEO/MD, the Chief Financial Officer (“CFO”) and heads of business units who sit on the Executive Leadership Team) as well as Non Executive Directors. There were seven Executive KMP in FY15, compared to the five that were disclosed in FY14, as a result of changes to the Executive Leadership Team structure during FY15. There have also been two changes to Non-Executive Directors. For the year ended 30 June 2015, the KMP were: KMP Position Term as KMP

Non-Executive Directors John Mulcahy Chair Full Year Christine Bartlett Director (appointed 1 December 2014) Part Year Peter Hawkins Director Full Year James M. Millar AM Director Full Year Samantha Mostyn Director (appointed 1 March 2015) Part Year John Peters Director Full Year Elana Rubin Director Full Year Executive KMP Susan Lloyd-Hurwitz CEO/MD Full Year Andrew Butler Group Executive, Office & Industrial Full Year John Carfi Group Executive, Residential Development Full Year Brett Draffen Chief Investment Officer Full Year Shane Gannon CFO Full Year Susan MacDonald Group Executive, Retail Full Year David Rolls Group Executive, Commercial Development Full Year

The information provided in this Remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

12 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued 3 Summary of FY15 remuneration Strong revenue and profit growth over the past year are reflected in above-target STI payouts. However, write-downs have reduced our return on equity over the last three years, resulting in reduced LTI vesting.

Fixed remuneration Fixed remuneration increases The responsibilities of Brett Draffen and Susan MacDonald were increased in the restructure on 1 July 2014. As a result, their fixed remuneration was also increased. CEO/MD remuneration Remuneration changes for CEO/MD The CEO/MD’s fixed remuneration was not increased during FY15 as it remained competitive with the market. Total remuneration for the CEO/MD in the table in section 6 increased from $2.8m to $3.9m in FY15, due a larger STI outcome, and the partial vesting of the FY13 LTI award. STI Increased STI payouts Strong results across all operating metrics resulted in increased STI payouts. The FY15 STI pool was 137% of target in FY15 (up from 110% in FY14), driven by — operating earnings increasing to $454.8m from $437.8m — ROIC performance improving to 9.0% from 7.8% — achieving target for all 12 non-financial measures. As a result, average STI payouts for Executive KMP increased from 116% of target in FY14 to 140% in FY15. LT I Vesting at 36.5%, reflecting below-target ROE and above-target TSR Vesting of LTI grants is dependent on achieving target on ROE and TSR over a three year period. This year’s vesting was impacted by below-target ROE performance, largely due to impairments recognised in the performance period. This resulted in none of the awards relating to the ROE hurdle vesting. TSR performance was above threshold but below maximum, resulting in 73% of the awards subject to the TSR hurdle vesting. As a result, 36.5% of overall LTI awards vested. Non-Executive Director Non-Executive Director fee pool increased after approval at the 2014 AGM fees An increase in the maximum aggregate Non-Executive Director annual remuneration from $1.95m to $2.25m was approved at the 2014 AGM. Non-Executive Director fee structure simplified The individual committee member fees have been replaced with a single fee of $18,000 per annum for serving on one or more Board committees. The previous fees paid to the Chairs of the ARCC and the HRC have been replaced with a fee of $30,000 per annum, which is in addition to the committee fee. Individual NED fee levels remain in line with FY14.

4 Our people At Mirvac, we believe that creating the right workplace culture will help us to attract, retain and motivate talented individuals. At Mirvac, our remuneration strategy is one element of our overall people strategy, designed to create a distinctive culture that helps us attract, grow, engage and retain high-quality employees. In FY15, our people strategy focused on diversity, inclusion and innovation, as we strove to create an environment that encourages the unique talents and experiences of our people. Initiatives included the creation of a flexible work program that will underpin our transition to our new headquarters in 2016; the introduction of an innovative new induction process to introduce new starters to our culture and organisation; and our sponsorship of the Equilibrium Man Challenge, a micro-documentary that follows a group of men moving to flexible working arrangements. Mirvac’s innovation program, Hatch, also trained 45 Innovation Champions to act as advocates of innovation throughout the company — driving behaviours, and embedding cultural change at the front line. Mirvac’s efforts to create an inclusive and innovative culture are reflected in the achievement of a ‘Best Employer’ status based on our employee engagement survey with AonHewitt, and recognition by the Workplace Gender Equality Agency as an ‘Employer of Choice for Gender Equality’. We are also particularly proud of the fact that the Mirvac Board achieved 50/50 gender representation in FY15. Our remuneration strategy — for our executives, and for our people — supports our people strategy by rewarding high performance that supports our distinctive culture.

MIRVAC GROUP ANNUAL REPORT 2015 13 Directors’ report

Remuneration report / continued 5 Our remuneration strategy and the link to business strategy At Mirvac, our remuneration is linked to the drivers of our business strategy, helping to create sustainable value for shareholders. Mirvac’s remuneration strategy is designed to support and reinforce its business strategy. The at-risk components of remuneration are tied to measures that reflect the successful execution of our business strategy in both the short and long term.

Our strategic drivers... Are reflected in STI And LTI performance So Mirvac’s actual Directly affects what performance measures... measures... performance... executives are paid

Capital efficiency and Relative Total From FY13 – FY15 financial performance Shareholder Return — Mirvac’s TSR was Deliver top 3 (“TSR”) ranked at the 62nd AREIT returns. Measures the percentile relative to performance of Mirvac its comparison group. securities over time, relative to other entities — Mirvac’s average in a comparison group. annual ROE is 6.7% Return on Equity (“ROE”) Measures Mirvac’s LTI profitability relative to securityholders’ investment in the Group. vesting outcome Operating earnings In FY15 in FY15 Reflects how much — Operating earnings revenue the business has were $454.8m, up generated for the year, 4% from $437.8m = 36.5% less operating costs. in FY14 of target Return on Invested — ROIC was 9.0% up Capital (“ROIC”) from 7.8% in FY14. Measures Mirvac’s profitability relative to its total assets. It is calculated by dividing the company’s annual earnings by its total assets. CEO/MD Customer and Customer / investor STI investor satisfaction satisfaction measures: Provide customers and Measures include retail outcome investors an experience customer and office that delivers excellence, tenant satisfaction consistently exceeds surveys, as well as in FY15 = expectations and residential customer engenders loyalty. satisfaction surveys. 164% of target

High performing People measures: people and culture Measures include talent Have an engaged and turnover, diversity Average motivated workforce targets, and succession with superior skills planning targets. STI in and capabilities. In FY15 — Mirvac achieved 12 out of the 12 FY15 for non‑financial targets. other eligible Senior

HSE&S leadership HSE&S leadership Executives Be recognised as a measures: leader in sustainability. Measures include = 136% Provide workplaces Lost Time Injury free from harm and Frequency Rate, timely of target supported by a culture incident reporting, and where safety remains sustainability targets. an absolute priority.

See section 8, page 16 See section 8, page 16 See section 8, page 16 for additional details for additional details for additional details

14 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued 6 Actual remuneration earned in FY15 This year’s remuneration reflected our ongoing commitment to paying for performance. Strong FY15 business performance resulted in increased STI payouts, but LTI vesting was substantially lower than FY14. The following table sets out the actual value of the remuneration earned by Executive KMP members during the year. The figures in this table are different from those shown in the accounting table in section 12 because that table includes an apportioned accounting value for all unvested LTI grants during the year (some of which remain subject to satisfaction of performance and service conditions and may not ultimately vest). The table below, on the other hand, shows the LTI value based on the awards that actually vested as a result of performance in FY15. The table below presents: — Fixed remuneration; — Cash STI: the non-deferred portion of STI payments to be made in September 2015 in recognition of performance during FY15; — Deferred STI realised: the value of the deferred STI from prior years that was realised in FY15; and — LT I : the value to the participant during FY15 of performance rights whose performance period ended 30 June 2015. Actual remuneration paid in FY15 Deferred Fixed Cash STI Employee Termination remuneration STI realised LTI loans 1 benefits Other 2 Total Executive KMP Year $ $ $ $ $ $ $ $

Susan Lloyd-Hurwitz 2015 1,500,000 1,381,641 212,926 767,963 — — 24,046 3,886,576 2014 1,500,000 1,160,156 — — — — 134,938 2,795,094 Andrew Butler 2015 700,000 550,200 76,313 337 — — 10,977 1,337,827 2014 700,000 415,800 — 14,163 600,159 — 319,418 2,049,540 John Carfi 3 2015 700,000 481,425 — 21,051 — — 11,353 1,213,829 Brett Draffen 2015 950,000 933,375 118,829 331,872 — — 15,368 2,349,444 2014 900,000 647,460 — 817,353 581,835 — 464,702 3,411,350 Shane Gannon 2015 900,000 707,400 67,149 — — — 234,685 4 1,909,234 2014 527,962 365,878 — — — — 355,614 1,249,454 Susan MacDonald 3 2015 700,000 481,425 — 379,836 — — 11,353 1,572,614 David Rolls 3 2015 700,000 481,425 — — — — 11,353 1,192,778

1) Amount reported includes amounts forgiven during the year, imputed interest and related fringe benefits tax (“FBT”). 2) Includes long service leave accrued during the year. 3) Appointed to a KMP position effective 1 July 2014. 4) Includes a payment of $220,000 as part compensation for the STI and LTI entitlements he forfeited on resigning from his previous employer.

MIRVAC GROUP ANNUAL REPORT 2015 15 Directors’ report

Remuneration report / continued 7 Executive KMP remuneration at Mirvac Mirvac’s executive remuneration approach is strongly performance focused. A significant proportion of executive remuneration is based on sustained performance, aligned with the business strategy. Our executive remuneration is: 1) Performance based: more than 60 per cent of total remuneration is “at-risk”; 2) Equity focused: almost half the CEO/MD’s total remuneration is paid in equity and a third of other Executive KMP members total remuneration is paid in equity; 3) Increases ownership: Executive KMP members are required to hold securities of a minimum value of 50 per cent of their fixed remuneration, and the CEO/MD is required to hold 100 per cent; and 4) Multi-year focused: 50 per cent of STI deferral is subject to a one-year holding lock and the remaining 50 per cent to a two-year holding lock. LTI performance is measured over a three year period. The graphs below set out the remuneration structure and mix for the CEO/MD and other Executive KMP members at Mirvac. CEO/MD

PERFORMANCE DEPENDENT

Fixed remuneration Target STI Max LTI 31% 23% 46%

Cash Deferred TSR (50% of award) ROIC (50% of award) 17% 6% 23% 23%

50% deferred for 12 months Granted as performance rights 50% deferred for 24 months with performance measured over a Subject to clawback three year period. Subject to clawback

Other Executive KMP

PERFORMANCE DEPENDENT

Fixed remuneration Target STI Max LTI 40% 30% 30%

Cash Deferred TSR (50% of award) ROIC (50% of award) 22.5% 7.5% 15% 15%

50% deferred for 12 months Granted as performance rights 50% deferred for 24 months with performance measured over a Subject to clawback three year period. Subject to clawback

8 Business and executive remuneration outcomes Financial performance vs average STI outcome STI and LTI outcomes reflect and reward the strong results across all measures of performance in FY15. 160% of target a) How the Group’s performance has translated into STI awards 140 FY15 performance was strong, with both operating earnings and ROIC significantly higher than FY14. The Group’s STI scorecard of 137 per cent (of a potential 150 per cent) reflects 120 this achievement. Mirvac’s financial performance directly affects the STI awards 100 in two ways: — the STI has a gateway requirement of Group operating 80 earnings being at least 90 per cent of target; and — the Group’s STI scorecard has two financial measures, each worth 35 per cent of the total pool: operating earnings and ROIC. 60 The following graph shows how the average STI outcome for all employees has been closely tied to performance on 40 these two measures since FY11. The increase in STI outcome for FY15 reflected Mirvac achieving stretch targets for the FY11 FY12 FY13 FY14 FY15 non‑financial measures, in addition to the strong performance on the financial measures. Operating earnings ROIC Average STI

16 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued Financial performance in each case is expressed as a percentage of the business target set for the year, while the STI outcome represents the average STI award to participants that year as a percentage of target. b) STI awards in FY15 The diagram below sets out Mirvac’s performance and the resulting STI outcomes:

Gateway achieved (over 90% of target operating earnings achieved)

Threshold 75% Target 100% Stretch 150%

Operating earnings (weighting = 35%) % of plan awarded = 112%

ROIC (weighting = 35%) % of plan awarded = 150%

Non-financial measures (weighting = 30%) % of plan awarded = 150%

HRC approved a Group STI score of 137% of target (from a maximum potential pool of 150% of target) FY15 STI pool = $29.2 million (6.4% of Mirvac’s operating earnings)

Each participant is awarded an individual STI score between zero and 135% of their STI target. Scores are based on an assessment of their personal performance for the year against objectives linked to Mirvac’s strategic drivers

Once the Group and Individual STI scores are determined, an individual’s STI award is calculated as follows:

Individual Group Individual Fixed Individual STI award STI score STI score remuneration STI target (capped at 200% (0-150%) (0-135%) of target)

Executive KMP STI awards in FY15 The following table shows the actual STI outcomes for each of the Executive KMP for FY15. STI target STI max Actual STI % of fixed % of fixed Actual STI STI forfeited (total) remuneration remuneration % max % max $

Susan Lloyd-Hurwitz 75 150 82 18 1,842,188 Andrew Butler 80 160 66 34 733,600 John Carfi 70 140 66 34 641,900 Brett Draffen 80 160 82 18 1,244,500 Shane Gannon 80 160 66 34 943,200 Susan MacDonald 70 140 66 34 641,900 David Rolls 70 140 66 34 641,900 c) How the Group’s performance has translated into LTI awards The three years to 30 June 2015 saw varied performance levels. The Group’s TSR was above the median of the comparator group, reflecting our focus on above-market, sustainable growth. This solid result is reflected in the vesting of 73 per cent of the FY13 award relating to TSR. The Group did not meet the threshold performance hurdle on ROE, largely due to impairments announced during the three-year performance period. As a result, the 50 per cent of the FY13 award that related to ROE will not vest. Mirvac’s financial performance directly affects the vesting of the LTI awards: — half of the LTI is subject to a relative TSR performance measure; and — the remaining half is subject to ROE (for grants made up to and including FY13) and ROIC (for grants made from FY14 onwards).

MIRVAC GROUP ANNUAL REPORT 2015 17 Directors’ report

Remuneration report / continued The diagram below sets out the Group’s performance and the resulting LTI outcomes for the Executive KMP.

FY13 LTI grants made to eligible participants and TSR and ROE performance hurdles are set

30 June 2015: three year performance period ends for the FY13 grants and performance is measured for TSR and ROE

Mirvac’s share price & distributions over the last five years Mirvac TSR (1 July 2012 – 30 June 2015)

$350m $2.0 120%

300 100% 1.5 250 80% 200 1.0 60% 150 40% 100 0.5

50 20%

0 0 0% FY11 FY12 FY13 FY14 FY15 30 Jun 12 30 Jun 13 30 Jun 14 30 Jun 15

Distributions paid ($m)Security price at 30 June ($) MGR 25th Percentile 50th Percentile 75th Percentile

Mirvac achieved a TSR of 85 per cent over the three year performance period, which positioned it at the 62nd percentile relative to the entities in the comparison group

73% of the performance rights linked to the TSR measure vested

ROE performance Mirvac’s ROE performance over the three years

Mirvac’s ROE has fluctuated over the last three years: 12 — FY13 did not meet the threshold; Stretch = 11 — FY14 exceeded the threshold; and

— FY15 exceeded the threshold. 9.9

Mirvac’s average annual ROE over the three Threshold = 7 year performance period was 6.7 per cent, E 6 7.4 resulting in below threshold performance. RO 6.7

2.9

0 FY13 FY14 FY15 3 year average

None of the performance rights linked to the ROE measure vested

36.5% Vesting of the total FY13 LTI award

18 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued Executive KMP vesting outcomes in FY15 The performance outcomes resulted in the following individual vesting results: Rights granted in FY13 Rights vested in FY15 Rights forfeited in FY15 % of % of Executive KMP Number Value ($) 1 total grant Number Value ($) 1 total grant Number Value ($) 1

Susan Lloyd-Hurwitz 1,137,300 816,013 36.5 415,144 297,845 63.5 722,186 518,168 John Carfi 30,367 21,788 36.5 11,083 7,953 63.5 19,284 13,835 Brett Draffen 489,800 351,432 36.5 178,777 128,273 63.5 311,023 223,159 Susan MacDonald 127,131 91,216 36.5 46,402 33,294 63.5 80,729 57,922

1) Value of the grant has been estimated based on the fair value as calculated at the time of the grant. Executive KMP vesting outcomes for the past three years A summary of vesting under Mirvac’s performance-hurdled equity grants that have vested in the last three years is shown in the following table: Grant year Performance hurdle Test date Vested Lapsed

FY11 TSR 30 June 2013 0% 100% FY12 TSR and ROE 30 June 2014 77% 23% FY13 TSR and ROE 30 June 2015 36.5% 63.5%

9 Mirvac’s approach to executive remuneration The Board, Human Resources Committee, advisors and management work closely to apply our remuneration principles and ensure our strategy supports sustainable securityholder value. Mirvac’s remuneration strategy is designed to attract, motivate and retain the individuals who are best equipped to successfully execute the business strategy. a) How remuneration decisions are made Roles and responsibilities

Board Oversees remuneration

With advice from

Human Resources Committee › Four independent NED members › Advises Board on remuneration strategy › Specific recommendations on Director remuneration › Approves KMP terms of employment

Based on

Remuneration principles › Align and contribute to Mirvac’s key strategic business objectives and desired business outcomes › Align the interests of employees with those of securityholders › Assist Mirvac in attracting and retaining the employees required to execute the business strategy › Support Mirvac’s desired performance-based culture › Encompass the concept of pay parity and be fair and equitable › Be simple and easily understood

MIRVAC GROUP ANNUAL REPORT 2015 19 Directors’ report

Remuneration report / continued Targeted market positioning Expert input from management and external advisors Fixed remuneration at Mirvac is positioned at the median (50th The HRC has appointed Ernst & Young as its external percentile), with flexibility based on: remuneration advisor. Ernst & Young provides both information — the criticality of the role to successful execution of the on current market practice and independent input into key business strategy; remuneration decisions. — assessment of employee performance/potential; and Ernst & Young’s terms of engagement include specific measures — the employee’s experience level. designed to protect its independence. To effectively perform its role, Ernst & Young needs to interact with members of Target total remuneration is comprised of fixed remuneration, Mirvac management, particularly those in the Human Resources STI and LTI and is positioned at the median (50th percentile) team. However, to ensure independence, members of Mirvac’s with the opportunity to earn total remuneration up to the upper management are precluded from requesting services that would quartile (75th percentile) in the event that both the individual be considered to be a ‘remuneration recommendation’ as defined and the business achieve stretch targets. by the Corporations Amendment (Improving Accountability Minimum securityholding guidelines on Director and Executive Remuneration) Act 2011. Executive KMP members are expected to establish and During the year ended 30 June 2015, Ernst & Young provided maintain a securityholding to the value of 100 per cent the HRC with: of fixed remuneration for the CEO/MD and 50 per cent of fixed remuneration for all other Executive KMP members. — guidance in the review and design of executive remuneration strategy; Executive KMP members have five years to build up their — assistance in drafting of remuneration disclosures; securityholding to the suggested level. As at 30 June 2015, progress towards the minimum securityholding guidelines for — relative TSR performance calculations; and each continuing Executive KMP member was as follows: — market remuneration information which was used as an input to the annual review of the KMP and other selected Value of security- Minimum Executives’ remuneration. holding as security- No remuneration recommendations were provided by Date at 30 June holding Ernst & Young or any other advisor during the year. Executive securityholding 2015 guideline KMP member to be attained $ $ b) Market positioning Mirvac has adopted a market positioning strategy designed to Susan Lloyd-Hurwitz November 2017 100,744 1,500,000 attract and retain talented employees, and to reward them for Andrew Butler July 2017 86,288 350,000 delivering strong performance. The market positioning strategy John Carfi July 2019 345,678 350,000 also supports fair and equitable outcomes between employees. Brett Draffen July 2017 1,620,961 475,000 Definition of market Shane Gannon December 2018 — 450,000 When determining the relevant market for each role, Mirvac Susan MacDonald July 2019 211,638 350,000 considers the companies from which it sources talent, and to David Rolls July 2019 — 350,000 whom it could potentially lose talent. 10 How remuneration is structured For business roles: Our executive remuneration is focused on execution — the primary comparison group is the Australian Real Estate of business strategy. We provide market-competitive Investment Trust (“A-REIT”) sector, plus Lend Lease and remuneration and reward for performance that delivers Aveo Group; and strategic outcomes. — the secondary comparison group is a general industry a) Fixed remuneration: how does it work? comparison group with a similar market capitalisation Fixed remuneration acts as a base-level reward for a (50‑200 per cent of Mirvac’s 12 month average competent level of performance. It includes cash, compulsory market capitalisation). superannuation and any salary-sacrificed items (including FBT). For corporate roles: The following factors are taken into account when setting fixed — the primary comparison group is a general industry remuneration levels at Mirvac: comparison group with a similar market capitalisation — the size and complexity of the role; (50‑200 per cent of Mirvac’s 12 month average market — role accountabilities; capitalisation) to reflect the greater transferability of skills. — skills and experience of the individual; and Where disclosed data is unavailable, Mirvac relies on published remuneration surveys covering relevant industries and the — market pay levels for comparable roles. broader market. The opportunity value for the at-risk components of remuneration is determined by reference to fixed remuneration, so Mirvac is conscious that any adjustments to fixed remuneration have a flow-on impact on potential STI and LTI awards.

20 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued b) STI: how does it work? Purpose Motivate and reward employees for contributing to the delivery of annual business performance. Eligibility All permanent Mirvac employees employed on the award date are eligible to participate in the STI plan. Pool Group operating earnings must be at least 90 per cent of target before any STI payments are made. The size of the STI pool is then determined based on Group performance against a balanced scorecard of measures linked to Mirvac’s strategic drivers. Awards A target opportunity is set for each individual, which will be earned if Group and individual performance is on target. Actual STI awards can range from zero to double the target opportunity, depending on Group and individual performance, but is capped at a maximum of 200 per cent of target. Performance measures Performance is assessed against both Group and individual performance. Individual performance measures are set based on the specific responsibilities of each role. There are three Group performance measures: two financial measures (with a combined weighting of 70 per cent) and a scorecard of non-financial measures (with a combined weighting of 30 per cent), they are as follows: Category Measure Rationale for using Financial Operating earnings Reflects the underlying performance of Mirvac’s core business operations and represents a key driver of securityholder value. ROIC Reflects how efficiently Mirvac is using its assets to generate earnings. Non-financial Customer and investor Represents how well Mirvac is meeting the satisfaction expectations of key external stakeholders. High performing people There is a strong correlation between high and culture levels of employee engagement and total securityholder return. HSE&S leadership Mirvac is committed to providing a safe workplace for all of its employees and to ensuring its activities do not have an adverse impact on the environment. The targets for the non-financial individual measures are not disclosed as some are commercially sensitive. The measures are quantitative in nature and recurring targets will typically increase each year. Performance schedule For each performance measure on the Group STI Performance level Group STI score % target scorecard, a threshold, plan and stretch goal is Stretch 150 A sliding scale operates between threshold and plan, and between plan and stretch. Deferral For Executives: — 25 per cent of any STI award is deferred into rights over Mirvac securities (granted on the same date as the cash payment is made) and — 75 per cent is paid as cash. The rights vest in two tranches: 50 per cent after 1 year and 50 per cent after two years. If the deferred rights vest, entitlements will be satisfied by the purchase of existing securities on-market. Executives are expected to retain the resulting securities they receive until they satisfy the minimum securityholding guidelines. Termination/forfeiture The deferred portion of an STI award is forfeited if an employee resigns or is dismissed for performance reasons prior to the vesting date. Unvested deferred STI awards may be retained if an employee leaves due to circumstances such as retirement, redundancy, agreed transfer to an investment partner, or total and permanent disablement or death. Clawback policy Mirvac has in place an incentive clawback policy for Executive KMP members and other Executives capable of influencing the results of the Group. The policy gives the HRC the ability to claw back incentives in the event of a material financial misstatement. The clawback provisions apply to unvested STI and LTI awards received after the introduction of the policy in February 2013. Hedging Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights.

MIRVAC GROUP ANNUAL REPORT 2015 21 Directors’ report

Remuneration report / continued c) LTI: how does it work? Purpose The purpose of LTI at Mirvac is to: — assist in attracting and retaining the required executive talent; — focus executive attention on driving sustainable long term growth; and — align the interests of executives with those of securityholders. Eligibility LTI grants are generally restricted to those Executives who are most able to influence securityholder value. Non-Executive Directors are not eligible to participate in the LTI plan. Instrument Awards under this plan are made in the form of performance rights. A performance right is a right to acquire one fully paid Mirvac security provided a specified performance hurdle is met. No dividends/distributions are paid on unvested LTI awards. This ensures that Executives are only rewarded when performance hurdles have been achieved at the end of the performance period. Grant value The maximum LTI opportunities during FY15 were equivalent to 150 per cent of fixed remuneration for the CEO/MD and 50 — 90 per cent of fixed remuneration for other Executive KMP. Grant price The grant price for a performance right is calculated as the average security price for the month leading up to grant, discounted for dividends and distributions not paid during the three year performance period. The grant price is not reduced based on performance conditions. Performance period Performance is measured over a three year period. For the FY15 grant, performance will be measured from 1 July 2014 to 30 June 2017. Performance hurdles The HRC reviews the performance conditions annually to determine the appropriate hurdles based on Mirvac’s strategy and prevailing market practice. Two performance measures apply to the LTI grants made during FY15: Relative TSR (50 per cent of the LTI allocation) ROIC (50 per cent of the LTI allocation) Relative TSR is used because it is an objective ROIC is used because it is aligned to Mirvac’s measure of securityholder value creation and is strategic drivers, in particular financial widely understood and accepted by the various performance and capital efficiency. key stakeholders. ROIC is calculated by taking the average of the three Mirvac’s TSR performance is measured relative annual ROIC figures (which are calculated as adjusted to that of a comparison group consisting of earnings of a financial year divided by average Mirvac’s primary market competitors: the monthly operating assets for the financial year). constituents of the S&P/ASX 200 A-REIT Index, These adjustments are made to ensure that Lend Lease Corporation Limited and Aveo Group. rewards reflect management’s contribution to Mirvac’s long term performance. In FY16, it is proposed that the threshold and stretch performance levels for ROIC be increased, to reflect Mirvac’s expectations for returns through the cycle, and over the longer term. Vesting schedule Relative TSR ROIC Percentage of Percentage of Relative TSR TSR-tested Average ROIC-tested Performance level (percentile) rights to vest annual ROIC (%) rights to vest

22 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued Termination/forfeiture Resignation or dismissal: all unvested performance rights are forfeited. Retirement, redundancy, agreed transfer to an investment partner, total and permanent disablement or death: the HRC determines the number of rights which will lapse or are retained, subject to both the original performance period and hurdles. Change of control event: the HRC determines the number of performance rights that vest, if any, taking into account the performance from the date of grant to the event. Dilution Dilution that may result from securities being issued under Mirvac’s LTI plan is capped at the limit set out in ASIC Class Order 03/184, which provides that the number of unissued securities under those plans must not exceed five per cent of the total number of securities of that class as at the time of the relevant offer. Hedging Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights.

11 LTI grants in FY15 The table below presents the LTI grants made during FY15 and due to vest in 1 July 2017, subject to the performance conditions. Accounting standards require the estimated valuation of the grants recognised over the performance period. The minimum value of the grant is nil if the performance conditions are not met. The maximum value is based on the estimated fair value calculated at the time of the grant and amortised in accordance with the accounting standard requirements. Fair value per Number of performance Maximum total LTI max as a % of Performance performance right value of grant 2015 fixed remuneration measure rights granted $ $

Susan Lloyd-Hurwitz TSR 730,500 0.60 438,300 ROIC 730,500 0.79 577,095 Total 150 1,461,000 1,015,395

Andrew Butler TSR 204,545 0.60 122,727 ROIC 204,545 0.79 161,591 Total 90 409,090 284,318

John Carfi TSR 204,545 0.60 122,727 ROIC 204,545 0.79 161,591 90 409,090 284,318

Brett Draffen TSR 277,597 0.60 166,558 ROIC 277,597 0.79 219,302 Total 90 555,194 385,860

Shane Gannon TSR 262,987 0.60 157,792 ROIC 262,987 0.79 207,760 Total 90 525,974 365,552

Susan MacDonald TSR 113,636 0.60 68,182 ROIC 113,636 0.79 89,772 50 227,272 157,954

David Rolls TSR 113,636 0.60 68,182 ROIC 113,636 0.79 89,772 Total 50 227,272 157,954

Key inputs used in valuing performance rights granted during FY15 were as follows: Performance rights Performance rights

Grant date 17 December 2014 Exercise price $nil Performance hurdles Relative TSR and ROIC Expected life 2.5 years Performance period start 1 July 2014 Volatility 20% Performance testing date 1 July 2017 Risk-free interest rate (per annum) 2.20% Security price at grant date $1.795 Dividend/distribution yield (per annum) 5.0%

MIRVAC GROUP ANNUAL REPORT 2015 23 Directors’ report

Remuneration report / continued 12 Total remuneration in FY15 The following table shows the total remuneration for members of the Executive KMP for FY15 and FY14 (including FY14 remuneration details for individuals who are no longer Executive KMP but were included in the FY14 Remuneration Report) calculated in accordance with AAS and, accordingly, it differs from the information presented in the table in section 6. Other Post- long term Total Short term benefits employment Share based payments benefits remuneration Long Performance Other service related Cash salary Cash Non-cash Employee short term Super Value of Deferred leave remuneration and fees 1 STI 2 benefits 3 loans 4 benefits 5 contributions rights 6 STI (“LSL”) 7 % of total Year $ $ $ $ $ $ $ $ $ $ remuneration

Executive Director Susan Lloyd-Hurwitz 2015 1,442,910 1,381,641 38,307 — 10,467 18,783 606,853 244,262 24,046 3,767,269 59 2014 1,443,918 1,160,156 61,682 — 87,500 17,775 640,855 257,813 24,063 3,693,762 56 Other Executive KMP Andrew Butler 2015 640,210 550,200 41,006 — — 18,783 99,648 95,185 10,977 1,456,009 51 2014 619,967 415,800 62,258 600,159 309,000 17,775 7,063 92,400 10,418 2,134,840 24 John Carfi 8 2015 681,217 481,425 — — — 18,783 107,622 66,865 11,353 1,367,265 48 Brett Draffen 2015 922,195 933,375 9,022 — — 18,783 171,934 158,860 15,368 2,229,537 57 2014 872,446 647,460 9,779 581,835 450,000 17,775 329,951 143,880 14,702 3,067,828 37 Shane Gannon 2015 881,217 707,400 — — 220,000 18,783 177,879 114,765 14,685 2,134,729 47 2014 514,631 365,878 — — 347,038 13,331 56,028 81,306 8,576 1,386,788 36 Susan MacDonald 8 2015 681,217 481,425 — — — 18,783 162,456 66,865 11,353 1,422,099 50 David Rolls 8 2015 681,217 481,425 — — — 18,783 121,016 66,865 11,353 1,380,659 48 Total 2015 5,930,183 5,016,891 88,335 — 230,467 131,481 1,447,408 813,667 99,135 13,757,567 53 2014 3,450,962 2,589,294 133,719 1,181,994 1,193,538 66,656 1,033,897 575,399 57,759 10,283,218 41

Former Executive KMP Jonathan Hannam 2014 522,225 356,400 — — 806 17,775 127,129 79,200 8,703 1,112,238 51

1) Cash salary and fees includes accrued annual leave paid out as part of salary. 2) STI payments relate to cash portion of STI awards accrued for the relevant year. 3) Non-cash benefits include salary-sacrificed benefits and related FBT where applicable. 4) Employee loans are interest free and provided for personal use. Disclosed value includes amounts forgiven during the year, imputed interest and related FBT. 5) Includes relocation expenses for the CEO/MD and payments to the CFO as part compensation for the STI and LTI entitlements he forfeited on resigning from his previous employer. 6) Valuation of rights is conducted by an external accounting firm. Negative amounts (if any) relate to forfeiture of some or all participation in equity plans due to terminations. 7) LSL relates to amounts accrued during the year. 8) Appointed to a KMP position effective 1 July 2014. 13 Service agreements for the Executive KMP There were no changes to the service agreements for Executive KMP in FY15. Each Executive KMP member, including the CEO/MD, has a formal contract, known as a service agreement. These agreements are of a continuing nature and have no set term of service (subject to the termination provisions). The key terms of the service agreements for the CEO/MD and other Executive KMP members are summarised below: Notice period Termination Contract term Employee Group payment 1

Susan Lloyd-Hurwitz No fixed term 6 months 6 months 6 months Other Executive KMP No fixed term 3 months 3 months 9 months

1) Payable if Mirvac terminates employee with notice, for reasons other than unsatisfactory performance. 14 Non-Executive Directors’ remuneration Non-Executive Directors’ fee arrangements were simplified in FY15, with no change in fee quantum from FY14. In contrast to Executives’ remuneration, the remuneration of Mirvac’s Non-Executive Directors is not linked to performance. This is consistent with Non-Executive Directors being responsible for objective and independent oversight of the Group. a) Remuneration strategy and components Mirvac Limited’s Constitution provides that Non-Executive Directors may determine their own remuneration but the total amount provided to all Directors (not including the CEO/MD and any other Executive Directors) must not exceed the sum agreed by securityholders at a general meeting. The maximum aggregate remuneration of $2.25m per annum was approved by securityholders at the 2014 AGM. Non-Executive Directors have not received any fees other than those described in this section, and do not receive bonuses or any other incentive payments or retirement benefits. The Non-Executive Directors are reimbursed for expenses properly incurred in performing their duties as a Director of Mirvac. Fees for Non-Executive Directors have been simplified for FY15: — the individual committee member fees have been replaced with a single fee of $18,000 per annum for serving on one or more Board committees. — the previous fees paid to the Chairs of the ARCC and the HRC have been replaced with a fee of $30,000 per annum which is in addition to the committee fee.

24 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued The schedule of fees for Non-Executive Directors during FY15 is set out in the table below and fees are annual fees, unless otherwise stated: Board/committee $

Mirvac Limited and Mirvac Funds Limited Board Chair 480,000 1 Mirvac Limited and Mirvac Funds Limited Board member 185,000 ARCC and HRC Chair 30,000 2 Committee member 18,000 3 Due Diligence Committee (per diem fee) 4,000

1) Chair fee covers all Board and committee responsibilities. 2) The ARCC and HRC Chair fee is in addition to the Committee member fee. 3) The single committee fee is paid once for all committee memberships. b) Total remuneration for Non-Executive Directors Short term Post- benefits employment 1 Cash salary Super and fees contributions Total Year $ $ $

Non-Executive Directors John Mulcahy 2 2015 461,217 18,783 480,000 2014 393,213 17,775 410,988 Christine Bartlett 2015 108,143 10,274 118,417 Peter Hawkins 3 2015 214,217 18,783 233,000 2014 261,892 17,775 279,667 James M. Millar AM 2015 213,792 18,783 232,575 2014 213,225 17,775 231,000 Samantha Mostyn 2015 61,796 5,871 67,667 John Peters 2015 170,868 32,132 203,000 2014 171,259 31,741 203,000 Elana Rubin 4 2015 252,396 18,271 270,667 2014 233,397 17,628 251,025 Total 2015 1,482,429 122,897 1,605,326 2014 1,272,986 102,694 1,375,680

Former Non-Executive Directors Marina Darling 2014 59,497 5,503 65,000 James MacKenzie 2014 217,215 10,392 227,607

1) Relates to payments required under superannuation legislation. 2) John Mulcahy received an additional $29,524 in FY14 for his service on the Mirvac Capital Partners Limited and Mirvac Funds Management Limited boards. These fees ceased on his appointment to Mirvac Board Chair on 14 November 2013. 3) Peter Hawkins received an additional $46,667 for the period he acted as Mirvac Board Chair during July and August 2013. 4) Elana Rubin received an additional $18,000 in FY15 and $48,025 in FY14 for her service on the Mirvac Capital Partners Limited and Mirvac Funds Management Limited boards. c) Non-Executive Director minimum securityholding guidelines In order to further strengthen the alignment of interests between Non-Executive Directors and securityholders, FY12 saw the introduction of minimum securityholding guidelines. Under the guidelines, each Non-Executive Director will be required to hold a minimum securityholding of 25,000 Mirvac stapled securities. The securities can be acquired over a two year period. Date securityholding Number of securities held Non-Executive Director to be attained as at 30 June 2015

John Mulcahy July 2014 25,000 Christine Bartlett December 2016 25,000 Peter Hawkins July 2014 596,117 James M. Millar AM July 2014 40,714 Samantha Mostyn March 2017 15,000 John Peters July 2014 30,000 Elana Rubin July 2014 34,343

MIRVAC GROUP ANNUAL REPORT 2015 25 Directors’ report

Remuneration report / continued 15 Legacy remuneration arrangements a) Previous LTI plans closed for new grants Mirvac’s LTI plans have changed over time to align with market practice, while continuing to support Mirvac’s business strategy. The following historic LTI plans are no longer used for new LTI grants. Employee Incentive Scheme This plan provided loans to purchase Mirvac stapled securities. It is now closed to new participants. The plan will be run down until all loans under it are extinguished. Additional details are available in Mirvac Limited’s 2014 Annual Report. Loan based Long-Term Incentive Plan This plan also provided loans to purchase Mirvac stapled securities. It is now closed to new participants. Additional details are available in Mirvac Limited’s 2014 Annual Report. The eight year loan term expired on 14 December 2014. At this point the remaining securities were sold, with the proceeds applied against the outstanding loan balance, and any surplus paid to the participant. A summary of the transaction details for the three senior executive participants is presented in the table below: Outstanding Net sale Proceeds Number of loan balance proceeds after loan Executive KMP securities $ $ $

Andrew Butler 8,559 14,901 15,238 337 John Carfi 10,699 18,513 19,059 546 Brett Draffen 21,398 37,029 38,163 1,134

At 30 June 2015, no securities remain on issue under the loan based Long-Term Incentive Plan. 16 Additional required disclosures a) Equity instruments held by Directors Particulars of Directors’ interests in the stapled securities of Mirvac or a related body corporate, are as follows: Interests in securities of related Director Mirvac stapled securities entities or related body corporate

John Mulcahy (indirect) 25,000 — Susan Lloyd-Hurwitz (direct) 54,456 — — performance rights 4,298,989 — Christine Bartlett (direct) 1 25,000 — Peter Hawkins (direct and indirect) 596,117 — James M. Millar AM (indirect) 40,714 — Samantha Mostyn (direct) 2 15,000 — John Peters (indirect) 30,000 — Elana Rubin (direct) 34,343 —

1) Christine Bartlett was appointed as a Director on 1 December 2014. 2) Samantha Mostyn was appointed as a Director on 1 March 2015. b) Other directorships Details of all directorships of other listed companies held by each Director in the three years immediately before 30 June 2015 are as follows: Director Company Date appointed Date ceased

John Mulcahy ALS Limited (formerly Campbell Brothers Limited) February 2012 Current Coffey International Limited September 2009 Current GWA Group Limited November 2010 Current Susan Lloyd-Hurwitz Nil Christine Bartlett GBST Holdings Ltd June 2015 Current Peter Hawkins MG Responsible Entity Limited 1 April 2015 Current Westpac Banking Corporation December 2008 Current James M. Millar AM Fairfax Media Limited July 2012 Current Fantastic Holdings Limited May 2012 June 2014 Helloworld Limited September 2010 Current Samantha Mostyn Cover-More Group Limited December 2013 Current Transurban Holdings Limited December 2010 Current Virgin Australia Holdings Limited September 2010 Current John Peters Nil Elana Rubin Touchcorp Limited January 2015 Current

1) Peter Hawkins is a Director of MG Responsible Entity Limited, the responsible entity of MG Unit Trust which was listed on the ASX on 3 July 2015.

26 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued c) Other benefits Fees paid by Mirvac for Directors’ and Officers’ liability insurance are not itemised for each Director as their disclosure would breach the terms of the policy. Executives and Directors (including Non-Executive Directors) are entitled to participate in arrangements available to directly purchase Mirvac developed residential property, on the same terms and conditions as for other employees within the Group. d) Past financial performance The table below provides summary information on the Group’s earnings and securityholders’ wealth for the five years to 30 June 2015: FY15 FY14 FY13 FY12 FY11

Profit attributable to the stapled securityholders of Mirvac ($m) 609.9 447.3 139.9 416.1 182.3 Operating profit ($m) 454.8 437.8 377.6 366.3 358.5 Distributions paid ($m) 336.2 326.2 225.9 280.2 270.2 Security price at 30 June ($) 1.85 1.79 1.61 1.28 1.25 Operating earnings per stapled security (“EPS”) — diluted (cents) 12.3 11.9 10.9 10.7 10.5 Statutory EPS — basic (cents) 16.5 12.2 4.1 12.2 5.4 e) Equity instrument disclosures relating to KMP i) Security holdings The number of ordinary securities in Mirvac held during the year by each Director and other KMP, including their personally-related parties, is set out below. Balance Balance 1 July Changes 1 30 June

2015 Non-Executive Directors John Mulcahy 25,000 — 25,000 Christine Bartlett — 25,000 25,000 Peter Hawkins 596,117 — 596,117 James M. Millar AM 40,714 — 40,714 Samantha Mostyn — 15,000 15,000 John Peters 30,000 — 30,000 Elana Rubin 25,917 8,426 34,343 Executive KMP Susan Lloyd-Hurwitz 54,456 — 54,456 Andrew Butler 170,025 (602) 169,423 John Carfi — 248,036 248,036 Brett Draffen 516,929 437,789 954,718 Shane Gannon — — — Susan MacDonald — 114,399 114,399 David Rolls — — —

1) Changes include additions/disposals resulting from first or final disclosure of a KMP and vesting of performance rights. ii) Options No options granted as remuneration were held by KMP during FY15. iii) Performance rights held during the year The number of performance rights in Mirvac held during the year by each Director and other KMP, including their personally-related parties, is set out below: Balance Rights issued Other Balance Executive KMP 1 July under LTI changes 1 30 June

Susan Lloyd-Hurwitz 2,607,800 1,461,000 230,189 4,298,989 Andrew Butler 29,773 409,090 72,166 511,029 John Carfi — — 501,379 501,379 Brett Draffen 1,431,318 555,194 (467,883) 1,518,629 Shane Gannon 223,367 525,974 72,594 821,935 Susan MacDonald — — 719,199 719,199 David Rolls — — 499,821 499,821

1) Other changes include additions/disposals resulting from first or final disclosure of a KMP and other changes to security-holdings, options and performance rights.

MIRVAC GROUP ANNUAL REPORT 2015 27 Directors’ report

Remuneration report / continued iv) Performance right movements during the year Details of the movement in the number and value of performance rights held by Executive KMP during the year are set out below: Number Value at Number Value of Number Value of of rights grant date Vesting of rights rights vested of rights rights lapsed Executive KMP Grant date granted ($) date vested ($) 1 lapsed ($) 1

Susan Lloyd-Hurwitz 17 Dec 12 1,137,300 816,013 1 Jul 15 415,114 297,845 722,186 518,168 10 Dec 13 1,470,500 1,106,551 1 Jul 16 — — — — 17 Dec 14 1,461,000 1,015,395 1 Jul 17 — — — — Total 4,068,800 2,937,959 415,114 297,845 722,186 518,168

Andrew Butler 10 Dec 13 19,439 14,628 1 Jul 16 — — — — 17 Dec 14 409,090 284,318 1 Jul 17 — — — — Total 428,529 298,946 — — — —

John Carfi 17 Dec 12 30,367 21,788 1 Jul 15 11,083 7,953 19,284 13,835 10 Dec 13 61,922 46,596 1 Jul 16 — — — — 17 Dec 14 409,090 284,318 1 Jul 17 — — — — Total 501,379 352,702 11,083 7,953 19,284 13,835

Brett Draffen 17 Dec 12 489,800 351,432 1 Jul 15 178,777 128,273 311,023 223,159 10 Dec 13 345,171 259,741 1 Jul 16 — — — — 17 Dec 14 555,194 385,860 1 Jul 17 — — — — Total 1,390,165 997,033 178,777 128,273 311,023 223,159

Shane Gannon 10 Dec 13 223,367 168,084 1 Jul 16 — — — — 17 Dec 14 525,974 365,552 1 Jul 17 — — — — Total 749,341 533,636 — — — —

Susan MacDonald 17 Dec 12 127,131 91,216 1 Jul 15 46,402 33,294 80,729 57,922 17 Dec 12 158,914 2 208,177 1 Jul 15 158,914 208,177 — — 10 Dec 13 205,882 154,926 1 Jul 16 — — — — 17 Dec 14 227,272 157,954 1 Jul 17 — — — — Total 719,199 612,273 205,316 241,471 80,729 57,922

David Rolls 10 Dec 13 272,549 205,093 1 Jul 16 — — — — 17 Dec 14 227,272 157,954 1 Jul 17 — — — — Total 499,821 363,047 — — — —

1) The calculation of the value of performance rights used the fair value as determined at the time of grant. 2) Represents an unhurdled grant of performance rights made prior to her appointment to a KMP position.

28 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued e) Loans to Directors and other KMP Details of loans made to Directors and other KMP (including loans granted under the LTIP and EIS), including their personally-related parties, are set out below: i) Individuals with loans above $100,000 during the year Highest Balance Balance indebtedness 1 July 30 June during the year $ $ $

2015 Andrew Butler 317,342 296,389 317,342 John Carfi — 173,401 173,401 Brett Draffen 286,243 244,953 286,243 603,585 714,743 776,986

No write-downs or provision for impairment for receivables has been recognised in relation to any loans made to Directors or specified executives. f) Other transactions with KMP There are a number of transactions between KMP and the Group. The terms and conditions of these transactions are considered to be no more favourable than in similar transactions on an arm’s length basis. On occasions, Directors and other KMP may purchase goods and services from Mirvac. These purchases are on terms and conditions available to Mirvac employees generally. As set out in the Directors’ report, a number of the Directors of Mirvac are also Directors of other companies. On occasions, the Group may purchase goods and services from or supply goods and services to these entities. These transactions are undertaken on normal commercial terms and conditions and the Director or other KMP does not directly influence these transactions. g) Terms used in this Remuneration report Term Meaning

Adjusted earnings Statutory profit/ (loss) after tax excluding: income tax expense and benefits; interest expense; bank and inter‑company interest income; fair value of derivatives and exchange differences (FX); and changes in reserves (not including FX reserve). Clawback Mirvac’s clawback policy gives the HRC the ability to clawback incentives in the event of a material financial misstatement. The clawback provisions apply to unvested STI and LTI awards received after the introduction of the policy in February 2013. Executives Members of Mirvac’s Executive Leadership Team (including the Executive KMP and other executives). Executive KMP The KMP that are also part of the Executive Leadership Team (including the CEO/MD, the CFO and other senior executives). KMP KMP are those people with authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly. Operating assets Closing total assets excluding: cash and cash equivalents; tax assets; derivative financial assets; intercompany assets (that is, inter-company receivables and inter-company loans); shares in subsidiaries; and deferred land payable. Performance right A right to a Mirvac security at the end of a performance period, subject to the satisfaction of performance measures. ROIC Adjusted earnings of a financial year divided by average monthly operating assets for the financial year. TSR Total Shareholder Return measures the percentage growth in a company’s security price together with the value of dividends/distributions received during the period, assuming that all of those dividends/distributions are re‑invested into new securities.

MIRVAC GROUP ANNUAL REPORT 2015 29 Directors’ report

Corporate governance statement Significant changes in the state of affairs Mirvac is committed to ensuring that its systems, procedures Details of the state of affairs of the Group are disclosed within and practices reflect a high standard of corporate governance. the Operating and financial review section. The Directors believe that Mirvac’s corporate governance framework is critical in maintaining high standards of corporate Matters subsequent to the end of the year governance and fostering a culture that values ethical behaviour, No other circumstances have arisen since the end of the year integrity and respect to protect securityholders’ and other which have significantly affected or may significantly affect the stakeholders’ interests at all times. operations of Mirvac, the results of those operations, or the state of affairs of Mirvac in future years. During the year ended 30 June 2015, Mirvac’s corporate governance framework was consistent with the third edition of Insurance of officers the Corporate Governance Principles and Recommendations During the year, Mirvac paid a premium for an insurance released by the ASX Corporate Governance Council. policy insuring any past, present or future Director, secretary, executive officer or employee of the Group against certain Mirvac will now publish its Corporate governance statement liabilities. In accordance with commercial practice, the insurance on its website rather than in its Annual Report. Mirvac’s 2015 policy prohibits disclosure of the nature of the liabilities insured Corporate governance statement may be viewed or downloaded against and the amount of the premium. at: www.mirvac.com/about/corporate-governance. Auditor’s independence declaration Copies of the Group policies referred to in the Corporate governance statement 1 are also posted to Mirvac’s website: A copy of the auditor’s independence declaration required under www.mirvac.com/about/corporate-governance. section 307C of the Corporations Act 2001 is set out on page 31. Non-audit services Auditor Mirvac may decide to employ the auditor on assignments PricewaterhouseCoopers continues in office in accordance with additional to their statutory audit duties where the auditor’s section 327 of the Corporations Act 2001. expertise and experience with the Group are relevant. Rounding of amounts Details of the amounts paid or payable to the auditor Mirvac is an entity of the kind referred to in Class Order 98/100 (PricewaterhouseCoopers) for audit and non-audit services issued by ASIC, relating to the rounding off of amounts in the provided during the year ended 30 June 2015 are set out financial statements. Amounts in the financial statements have in note 27 to the financial statements. been rounded off to the nearest tenth of a million (“m”) dollars The Board has considered its position and, in accordance in accordance with that class order. with the advice received from the ARCC, is satisfied that This statement is made in accordance with a resolution the provision of non-audit services is compatible with the of the Directors. general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out in note 27 to the financial statements, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: Susan Lloyd-Hurwitz — all non-audit services have been reviewed by the ARCC Director to ensure they do not affect the impartiality and objectivity of the auditor; and Sydney — none of the services undermines the general principles 13 August 2015 relating to auditor independence as set out in Accounting Professional & Ethical Standards 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision‑making capacity for the Group, acting as advocate for the Group or jointly sharing economic risk and rewards.

1) Other than the Fraud, Bribery and Corruption Policy and the Political Donations Policy. A summary of these policies is contained in the Code of Conduct which is available on our website at: www.mirvac.com/about/corporate-governance.

30 MIRVAC GROUP ANNUAL REPORT 2015 Auditor’s independence declaration

As lead auditor for the audit of Mirvac Limited for the year ended 30 June 2015, I declare that to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit.

Matthew Lunn Sydney Partner 13 August 2015 PricewaterhouseCoopers

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation

MIRVAC GROUP ANNUAL REPORT 2015 31 Financial statements

These financial statements cover the financial Contents Page statements for the consolidated entity consisting of Mirvac Limited and its controlled entities. Consolidated statement of comprehensive income 33 The financial statements are presented in Consolidated statement of financial position 34 Australian currency. Consolidated statement of changes in equity 35 Mirvac Limited is a company limited by shares, Consolidated statement of cash flows 36 incorporated and domiciled in Australia. Its registered Notes to the consolidated financial statements 37 office and principal place of business are: Note Index Mirvac Limited Level 26 Basis of preparation 37 60 Margaret Street Results for the year Sydney NSW 2000. 1 Segmental information 37 A description of the nature of the consolidated entity’s 2 Revenue from continuing operations and other income 42 operations and its principal activities is included in the 3 Expenses 42 Directors’ report on pages 01 to 30, both of which are 4 Income tax 43 not part of these financial statements. 5 EPS 45 The financial statements were authorised for issue by Operating assets and liabilities the Directors on 13 August 2015. The Directors have the 6 Investment properties 46 power to amend and reissue the financial statements. 7 Assets classified as held for sale and discontinued operations 49 Through the use of the internet, Mirvac has ensured 8 PPE 50 that its corporate reporting is timely and complete. 9 Inventories 51 All press releases, financial reports and other 10 Financial assets and liabilities 51 information are available in the Investor Relations 11 Other non-financial assets and liabilities 53 section on the Group’s website: www.mirvac.com. Capital structure 12 Borrowings 55 13 Other financial assets and liabilities 57 14 Financial risk management 58 15 Fair value measurement of financial instruments 62 Group structure 16 Investments in JVA entities 64 17 Controlled entities and deed of cross guarantee 71 18 Parent entity financial information 77 Equity 19 Contributed equity 77 20 Reserves 78 21 Retained earnings 80 22 Dividends/distributions 80 Other information 23 Contingent liabilities 80 24 Commitments 81 25 Employee benefits 81 26 Related parties 83 27 Remuneration of auditors 85 28 Notes to the consolidated statement of cash flows 85 29 Events occurring after the end of the year 85 30 Summary of significant accounting policies 86 31 Critical accounting judgements and estimates 94 Directors’ declaration 97 Independent auditor’s report to the members of Mirvac Limited 98

32 MIRVAC GROUP ANNUAL REPORT 2015 Consolidated statement of comprehensive income For the year ended 30 June 2015

2015 2014 Note $m $m

Revenue from continuing operations Investment properties rental revenue 6 618.4 650.9 Investment management fee revenue 12.9 13.0 Development and construction revenue 1,008.2 1,157.6 Development management fee revenue 13.5 15.9 Interest revenue 2 32.6 22.2 Dividends/distributions revenue 0.4 0.5 Other revenue 9.6 7.9 Total revenue from continuing operations 1,695.6 1,868.0 Other income Net gain on fair value of investment properties and IPUC 6 140.8 48.8 Share of net profit of JVA accounted for using the equity method 16 68.0 46.9 Gain on fair value of derivative financial instruments 2 187.6 3.0 Net gain on sale of assets 2 59.9 — Foreign exchange gain — 7.5 Total other income 456.3 106.2 Total revenue from continuing operations and other income 2,151.9 1,974.2 Net loss on sale of assets 3 — 6.0 Net loss on sale of property, plant and equipment (“PPE”) 0.3 0.2 Foreign exchange loss 181.7 — Investment properties expenses 6 142.9 159.2 Cost of property development and construction 784.7 940.7 Employee benefits expenses 120.9 105.1 Depreciation and amortisation expenses 3 30.4 29.6 Impairment of goodwill 3 — 24.5 Impairment of loans, investments and inventories 3 (0.2) (1.2) Finance costs 3 145.1 144.8 Loss on fair value of derivative financial instruments 3 15.9 26.3 Selling and marketing expenses 46.1 31.0 Other expenses 56.2 47. 3 Profit from continuing operations before income tax 627.9 460.7 Income tax expense 4 (18.0) (13.4) Profit for the year 609.9 447. 3

Other comprehensive income for the year Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations, net of tax 20(b) 7.7 3.5 Items that will not be reclassified to profit or loss Increment/(decrement) on revaluation of OOP 20(b) 9.5 (4.8) Deferred tax on SBP transactions 20(b) — 0.4 Other comprehensive income for the year 17.2 (0.9) Total comprehensive income for the year 627.1 446.4

Profit for the year attributable to the stapled securityholders of Mirvac 609.9 447. 3 Total comprehensive income for the year attributable to the stapled securityholders of Mirvac 627.1 446.4 EPS for profit attributable to the stapled securityholders of Mirvac Cents Cents Basic EPS 5 16.51 12.19 Diluted EPS 5 16.50 12.17

The above consolidated statement of comprehensive income (“SoCI”) should be read in conjunction with the accompanying notes.

MIRVAC GROUP ANNUAL REPORT 2015 33 Consolidated statement of financial position As at 30 June 2015

2015 2014 Note $m $m

Current assets Cash and cash equivalents 28 59.8 97.8 Receivables 10.1 73.0 98.7 Derivative financial assets 13.1 — 15.7 Inventories 9 774.2 598.1 Other financial assets at fair value through profit or loss 13.2 11.3 11.8 Other financial assets 13.3 — 52.0 Other assets 11.1 21.6 22.7 Assets classified as held for sale 7 — 821.0 Total current assets 939.9 1,717.8

Non-current assets Receivables 10.1 56.8 60.5 Inventories 9 939.2 859.1 Investments accounted for using the equity method 16 562.2 537.6 Derivative financial assets 13.1 175.9 11.3 Other financial assets 13.3 264.6 79.4 Investment properties 6 6,751.1 6,016.4 PPE 8 261.9 248.7 Intangible assets 11.2 39.0 39.0 Deferred tax assets 4 412.9 351.9 Total non-current assets 9,463.6 8,203.9 Total assets 10,403.5 9,921.7

Current liabilities Payables 10.2 673.1 505.1 Borrowings 12 0.2 202.9 Derivative financial liabilities 13.1 12.4 13.0 Provisions 11.3 201.5 178.2 Other liabilities 11.4 0.2 0.2 Total current liabilities 887.4 899.4

Non-current liabilities Payables 10.2 113.5 85.0 Borrowings 12 2,633.7 2,514.7 Derivative financial liabilities 13.1 76.0 98.7 Deferred tax liabilities 4 213.7 144.3 Provisions 11.3 17.1 3.5 Total non-current liabilities 3,054.0 2,846.2 Total liabilities 3,941.4 3,745.6 Net assets 6,462.1 6,176.1

Equity Contributed equity 19 6,804.3 6,796.8 Reserves 20 94.5 76.9 Retained earnings 21 (436.7) (697.6) Equity, reserves and retained earnings attributable to the stapled securityholders of Mirvac 6,462.1 6,176.1

The above consolidated statement of financial position (“SoFP”) should be read in conjunction with the accompanying notes.

34 MIRVAC GROUP ANNUAL REPORT 2015 Consolidated statement of changes in equity For the year ended 30 June 2015

Attributable to the stapled securityholders of Mirvac Contributed Retained equity Reserves earnings Total Note $m $m $m $m

Balance 30 June 2013 6,745.3 79.8 (814.3) 6,010.8 Profit for the year — — 447.3 447.3 Other comprehensive income for the year — (0.9) — (0.9) Total comprehensive income for the year — (0.9) 447.3 446.4 EEP securities issued 19 0.7 — — 0.7 LTP, LTIP and EIS securities converted, sold, vested or forfeited 19 5.3 — — 5.3 DRP securities issued 19 46.0 — — 46.0 Contributed equity, raising costs 19 (0.5) — — (0.5) SBP transactions 20 — 4.4 — 4.4 Security based compensation 21 — — (1.5) (1.5) Dividends/distributions provided for or paid 21 — — (331.1) (331.1) Transfers due to deconsolidation of entity 21 — (3.2) (1.2) (4.4) Transfers (out)/in 21 — (3.2) 3.2 — Total transactions with owners in their capacity as owners 51.5 (2.0) (330.6) (281.1) Balance 30 June 2014 6,796.8 76.9 (697.6) 6,176.1 Profit for the year — — 609.9 609.9 Other comprehensive income for the year — 17.2 — 17.2 Total comprehensive income for the year — 17.2 609.9 627.1 EEP securities issued 19 0.8 — — 0.8 LTP, LTIP and EIS securities converted, sold, vested or forfeited 19 6.7 — — 6.7 SBP transactions 20 — 0.4 — 0.4 Security based compensation 21 — — (1.4) (1.4) Dividends/distributions provided for or paid 21 — — (347.6) (347.6) Total transactions with owners in their capacity as owners 7.5 0.4 (349.0) (341.1) Balance 30 June 2015 6,804.3 94.5 (436.7) 6,462.1

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

MIRVAC GROUP ANNUAL REPORT 2015 35 Consolidated statement of cash flows For the year ended 30 June 2015

2015 2014 Note $m $m

Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) 2,052.1 1,845.4 Payments to suppliers and employees (inclusive of goods and services tax) (1,555.4) (1,325.5) 496.7 519.9 Interest received 23.5 18.1 Dividends/distributions received from JVA 41.6 17.6 Dividends/distributions received 0.4 0.5 Borrowing costs paid (149.5) (156.8) Net cash inflows from operating activities 28(b) 412.7 399.3

Cash flows from investing activities Payments for PPE (12.8) (3.7) Proceeds from sale of PPE 0.2 0.1 Payments for investment properties (977.0) (850.0) Proceeds from sale of investment properties and assets held for sale 1,072.3 226.5 Payments for loans to unrelated entities — (14.7) Proceeds from loans to unrelated entities 81.6 8.0 Contributions to JVA (40.0) (86.9) Proceeds from JVA 12.3 12.9 Proceeds from sale of investments 11.5 — Net cash inflows/(outflows) from investing activities 148.1 (707.8)

Cash flows from financing activities Proceeds from borrowings 1,119.9 2,717.2 Repayments of borrowings (1,382.5) (2,156.6) Contributed equity raising costs 19 — (0.5) Dividends/distributions paid (336.2) (280.2) Net cash (outflows)/inflows from financing activities (598.8) 279.9

Net decrease in cash and cash equivalents (38.0) (28.6) Cash and cash equivalents at the beginning of the year 97.8 126.4 Cash and cash equivalents at the end of the year 28(a) 59.8 97.8

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

36 MIRVAC GROUP ANNUAL REPORT 2015 Notes to the consolidated financial statements

BASIS OF PREPARATION vi) Goods and services tax (“GST”) Revenues, expenses and assets are recognised net of the a) Mirvac — stapled securities amount of associated GST, unless the GST incurred is not A Mirvac stapled security comprises one Mirvac Limited share recoverable from the taxation authority. In this case, it is “stapled” to one MPT unit to create a single listed security recognised as part of the cost of acquisition of the asset or traded on the ASX. The stapled securities cannot be traded or as part of the expense. Receivables and payables are stated dealt with separately. With the establishment of the Group and inclusive of the amount of GST receivable or payable. The net its common investors, Mirvac Limited and Mirvac Funds Limited amount of GST recoverable from, or payable to, the taxation (as responsible entity for MPT) have common directors and authority is included with other receivables or payables in the operate as Mirvac Group with two core divisions: Investment and consolidated SoFP. Cash flows are presented on a gross basis. Development. The entities forming the stapled group entered The GST components of cash flows arising from investing or into a Deed of Cooperation. This Deed of Cooperation allows financing activities which are recoverable from or payable to that members of the stapled group, where permitted by law, will the taxation authority, are presented as operating cash flow. carry out activities with other members on a cost recovery basis, thereby maintaining the best interests of Mirvac as a whole. vii) New and amended standards adopted by the Group The Group has applied the following standards and amendments The two Mirvac entities comprising the stapled group, remain for first time for their annual reporting period commencing separate legal entities in accordance with the Corporations Act 1 July 2014: 2001, and are each required to comply with the reporting and disclosure requirements of AAS and the Corporations Act 2001. — AASB 2013-3 Amendments to AASB 136 — Recoverable In accordance with AAS, Mirvac Limited has been deemed the Amount Disclosures for Non-Financial Assets; parent entity of MPT. The stapled security structure will cease — Interpretation 21 Accounting for Levies; to operate on the first to occur of: — AASB 2014-1 Amendments to Australian Accounting Standards. — Mirvac Limited or MPT resolving by special resolution in The adoption of AASB 2013-3 had a small impact on the general meeting and in accordance with its Constitution impairment disclosures. Other than that, the adoption of these to terminate the stapling provisions; or standards did not have any impact on the current period or any — the commencement of the winding up of Mirvac Limited or MPT. prior period and is not likely to affect future periods. The ASX reserves the right (but without limiting its absolute As these amendments merely clarify the existing requirements, discretion) to remove one or more entities with stapled they do not affect the Group’s accounting policies or any of securities from the official list if any of their securities the disclosures. cease to be stapled together, or any equity securities of the same class are issued by one entity which are not stapled RESULTS FOR THE YEAR to equivalent securities in the other entity or entities. b) Basis of preparation 1 Segmental information These general purpose financial statements have been prepared a) Description of business segments in accordance with AAS, other authoritative pronouncements Management has determined the segments based on the of the AASB, Urgent Issues Group Interpretations and the reports reviewed by the ELT that are used to make strategic Corporations Act 2001. Mirvac Group is a for-profit entity decisions. The ELT considers the business from both a product, for the purpose of preparing the financial statements. and within Australia, a geographic perspective. Each division prepares an executive finance report on a monthly basis; i) Compliance with International Financial Reporting this is a detailed report that summarises the following: Standards (“IFRS”) — historic results of the division, using both statutory profit The consolidated financial statements of the Group also and operating profit; comply with IFRS as issued by the International Accounting Standards Board (“IASB”). — future forecast of the division for the remainder of the year; and — key risks and opportunities facing the division. ii) Historical cost convention The financial statements have been prepared on a historical cost The ELT assesses the performance of the segments based basis, except for the following: on a number of measures, both financial and non-financial, which include a measure of operating profit; the use of capital; — available-for-sale financial assets, financial assets and liabilities and success in delivering against KPI. The ELT has identified (including derivative instruments) at fair value through profit two core divisions, Investment and Development. Applying or loss, certain classes of PPE and investment properties; and the requirements of AASB 8 Operating Segments, Mirvac has — assets held for sale — measured at fair value less costs of disposal. two reportable segments, and in addition one business unit, iii) Critical accounting estimates Investment Management (including MAM), which does not The preparation of financial statements in conformity with AAS meet the requirements for aggregation and therefore has requires the use of certain critical accounting estimates. It also been shown separately: requires management to exercise its judgement in the process i) Investment of applying Mirvac’s accounting policies. The areas involving The division is made up of MPT and a small number of assets a higher degree of judgement or complexity, or areas where held by the company which holds investments in properties assumptions and estimates are significant to the financial covering the office, retail, industrial and hotel sectors throughout statements, are disclosed in note 31. Australia, held for the purpose of producing rental income, iv) Comparative information predominately through the Trust, its controlled trusts and Where necessary, comparative information has been reclassified corporate entities holding investment properties. Income is also to achieve consistency in disclosure with current year amounts derived from investments in JVA including Mirvac 8 Chifley Trust. and other disclosures. ii) Investment Management v) Rounding of amounts MIM comprises two business activities for segment reporting Mirvac is an entity of the kind referred to in Class Order 98/100 purposes, being capital management for listed and unlisted issued by ASIC, relating to the “rounding off” of amounts in the property funds on behalf of retail and institutional investors, financial statements. Amounts in the financial statements have and property asset management (MAM) on behalf of MPT, been rounded off to the nearest tenth of a million dollars in joint venture partners and external property owners. accordance with that class order.

MIRVAC GROUP ANNUAL REPORT 2015 37 Notes to the consolidated financial statements

1 Segmental information / continued e) Operating profit iii) Development Operating profit is a financial measure which is not prescribed The division’s primary operations are property development by AAS and represents the profit under AAS adjusted for and construction of residential, office, industrial and retail specific non-cash items and significant items which management development projects throughout Australia. In addition, considers to reflect the core earnings of the Group. project management fees are received from the management f) Segment assets and liabilities of development and construction projects on behalf of JVA The amounts provided to the ELT with respect to total assets and residential development funds. and total liabilities are measured in a manner consistent with b) Inter-segment transfers that of the consolidated financial statements. These assets and Segment revenues, expenses and results include transfers liabilities are allocated based on the operations of the segment between segments. Such transfers are on an arm’s length basis and physical location of the asset. The Group’s borrowings and and eliminated on consolidation. derivative financial instruments are not considered to be segment liabilities but rather are managed by the Mirvac Group Treasury. c) Elimination The elimination segment includes adjustment to eliminate g) Geographical and customer analysis trading between segments and to transfer balances to reflect Mirvac operates predominately in Australia. Materially, all correct disclosure of items on a consolidated basis. revenue is derived in Australia and all assets are in Australia. No single customer in the current or prior year provided more d) Comparative information than 10 per cent of the Group’s revenue. When necessary, comparative information has been reclassified to achieve consistency in disclosure in current year amounts and other disclosures.

Investment Consolidated Investment Management Development Unallocated Elimination SoCI 2015 $m $m $m $m $m $m

Revenue from continuing operations Investment properties rental revenue 609.6 8.8 — — — 618.4 Investment management fee revenue — 12.9 — — — 12.9 Development and construction revenue — — 1,008.2 — — 1,008.2 Development management fee revenue — — 13.5 — — 13.5 Interest revenue 22.0 0.4 9.1 1.2 (0.1) 32.6 Dividends/distributions revenue 0.4 — — — — 0.4 Other revenue — 2.7 4.4 — 2.5 9.6 Inter-segment revenue 8.3 19.2 97.7 59.9 (185.1) — Total revenue from continuing operations 640.3 44.0 1,132.9 61.1 (182.7) 1,695.6 Net gain on fair value of investment properties and IPUC 146.2 — — — (5.4) 140.8 Share of net profit of JVA accounted for using the equity method 60.6 1.2 5.5 0.7 — 68.0 Gain on fair value of derivative financialinstruments — — — 187.6 — 187.6 Net gain on sale of assets 16.1 — 43.8 — — 59.9 Total other income 222.9 1.2 49.3 188.3 (5.4) 456.3 Total revenue from continuing operations and other income 863.2 45.2 1,182.2 249.4 (188.1) 2,151.9 Net loss on sale of PPE — — 0.3 — — 0.3 Foreign exchange loss 3.1 — — 178.6 — 181.7 Investment properties expenses 152.8 2.5 — — (12.4) 142.9 Cost of property development and construction — — 880.9 — (96.2) 784.7 Employee benefits expenses — 26.5 25.6 68.8 — 120.9 Depreciation and amortisation expenses 21.6 0.5 2.1 2.1 4.1 30.4 Impairment of loans, investments and inventories — — — (0.2) — (0.2) Finance costs 73.5 — 73.2 60.0 (61.6) 145.1 Loss on fair value of derivative financialinstruments 7.1 — — 8.8 — 15.9 Selling and marketing expenses — 0.1 46.0 — — 46.1 Other expenses 11.9 10.5 27.5 21.3 (15.0) 56.2 Profit/(loss) from continuing operations before income tax 593.2 5.1 126.6 (90.0) (7.0) 627.9 Income tax expense (18.0) Profit attributable to the stapled securityholders of Mirvac 609.9

38 MIRVAC GROUP ANNUAL REPORT 2015 1 Segmental information / continued Investment Investment Management Development Unallocated Elimination Tax Consolidated 2015 $m $m $m $m $m $m $m

Profit/(loss) attributable to the stapled securityholders of Mirvac 593.2 5.1 126.6 (90.0) (7.0) (18.0) 609.9 Specific non-cash items Net gain on fair value of investment properties and IPUC (146.2) — — — 5.4 — (140.8) Net loss on fair value of derivative financial instruments and associated foreign exchange movements 1 10.2 — — (0.2) — — 10.0 SBP expense 2 — — — 5.6 — — 5.6 Depreciation of OOP 3 — — — — 6.1 — 6.1 Straight-lining of lease revenue 4 (5.3) — — — — — (5.3) Amortisation of lease fitout incentives 3 11.3 — — — (2.0) — 9.3 Net gain on fair value of investment properties, derivatives and other specific non-cash items included in share of net profit of JVA 5 (28.8) (0.6) — (0.4) — — (29.8) Significant items Impairment of loans, investments and inventories — — — (0.2) — — (0.2) Net gain from sale of non-aligned assets 6 (16.1) — — — — — (16.1) Restructuring costs 2, 7 — — — 6.8 — — 6.8 Tax effect Tax effect of non-cash and significant adjustments 8 — — — — — (0.7) (0.7) Operating profit/(loss) (profit before specific non-cash and significant items) 418.3 4.5 126.6 (78.4) 2.5 (18.7) 454.8

1) Total of Gain and Loss on fair value of derivative financial instruments and Foreign exchange loss in the consolidated SoCI. 2) Included within Employee benefits expenses in the consolidated SoCI. 3) Included within Depreciation and amortisation expenses in the consolidated SoCI. 4) Included within Investment properties rental revenue in the consolidated SoCI. 5) Included within Share of net profit of JVA accounted for using the equity method in the consolidated SoCI. 6) Included within Net gain on sale of assets in the consolidated SoCI. 7) Included within Other expenses in the consolidated SoCI. 8) Included in Income tax expense in the consolidated SoCI.

MIRVAC GROUP ANNUAL REPORT 2015 39 Notes to the consolidated financial statements

1 Segmental information / continued Investment Consolidated Investment Management Development Unallocated Elimination SoCI 2014 $m $m $m $m $m $m

Revenue from continuing operations Investment properties rental revenue 645.1 5.8 — — — 650.9 Investment management fee revenue — 13.0 — — — 13.0 Development and construction revenue — — 1,168.4 — (10.8) 1,157.6 Development management fee revenue — — 15.2 — 0.7 15.9 Interest revenue 15.6 0.3 5.1 1.5 (0.3) 22.2 Dividend and distribution revenue 0.5 — — — — 0.5 Other revenue 1.9 3.2 3.5 1.1 (1.8) 7.9 Inter-segment revenue 14.5 18.0 99.4 35.7 (167.6) — Total revenue from continuing operations 677.6 40.3 1,291.6 38.3 (179.8) 1,868.0 Net gain on fair value of investment properties and IPUC 37.9 — — — 10.9 48.8 Share of net profit of JVA accounted for using the equity method 37.5 0.1 8.7 0.6 — 46.9 Gain on fair value of derivative financialinstruments (4.3) — — 7.3 — 3.0 Foreign exchange gain 0.2 — — 7.3 — 7.5 Total other income 71.3 0.1 8.7 15.2 10.9 106.2 Total revenue from continuing operations and other income 748.9 40.4 1,300.3 53.5 (168.9) 1,974.2 Net loss on sale of assets 6.0 — — — — 6.0 Net loss on sale of PPE — — 0.2 — — 0.2 Investment properties expenses 169.2 2.2 — — (12.2) 159.2 Cost of property development and construction — — 1,037.8 — (97.1) 940.7 Employee benefits expenses — 23.8 17.3 64.0 — 105.1 Depreciation and amortisation expenses 21.3 0.5 2.3 1.7 3.8 29.6 Impairment of goodwill 24.5 — — — — 24.5 Impairment of loans, investments and inventories — — — (1.2) — (1.2) Finance costs 77.0 0.4 77.9 35.6 (46.1) 144.8 Loss on fair value of derivative financialinstruments 0.2 — — 25.5 0.6 26.3 Selling and marketing expenses — 0.2 30.4 0.4 — 31.0 Other expenses 12.6 7.5 22.4 17.3 (12.5) 47.3 Profit/(loss) from continuing operations before income tax 438.1 5.8 112.0 (89.8) (5.4) 460.7 Income tax expense (13.4) Profit attributable to the stapled securityholders of Mirvac 447.3

40 MIRVAC GROUP ANNUAL REPORT 2015 1 Segmental information / continued Investment Investment Management Development Unallocated Elimination Tax Consolidated 2014 $m $m $m $m $m $m $m

Profit/(loss) attributable to the stapled securityholders of Mirvac 438.1 5.8 112.0 (89.8) (5.4) (13.4) 447.3 Specific non-cash items Net gain on fair value of investment properties and IPUC (37.9) — — — (10.9) — (48.8) Net loss on fair value of derivative financial instruments and associated foreign exchange movements 1 4.3 — — 10.9 0.6 — 15.8 SBP expense 2 — — — 6.5 — — 6.5 Depreciation of OOP 3 — — — — 5.9 — 5.9 Straight-lining of lease revenue 4 (12.2) — — — — — (12.2) Amortisation of lease fitout incentives 3 12.4 — — — (2.1) — 10.3 Net gain on fair value of investment properties, derivatives and other specific non-cash items included in share of net profit of JVA 5 (20.2) 0.9 — (0.3) — — (19.6) Significant items Impairment of loans, investments and inventories — — — (1.2) — — (1.2) Impairment of goodwill 24.5 — — — — — 24.5 Net loss from sale of non-aligned assets 6 6.0 — — — — — 6.0 Tax effect Tax effect of non-cash and significant items adjustments 7 — — — — — 3.3 3.3 Operating profit/(loss) (profit before specific non-cash and significant items) 415.0 6.7 112.0 (73.9) (11.9) (10.1) 437.8

1) Total of Gain and Loss on fair value of derivative financial instruments and Foreign exchange gain in the consolidated SoCI. 2) Included within Employee benefits expenses in the consolidated SoCI. 3) Included within Depreciation and amortisation expenses in the consolidated SoCI. 4) Included within Investment properties rental revenue in the consolidated SoCI. 5) Included within Share of net profit of JVA accounted for using the equity method in the consolidated SoCI. 6) Net loss on sale of assets in the consolidated SoCI. 7) Included in Income tax expense in the consolidated SoCI. Investment Consolidated Investment Management Development Unallocated Elimination SoFP/SoCI 30 June 2015 $m $m $m $m $m $m

Total assets 7,785.5 41.3 2,411.5 1,477.5 (1,312.3) 10,403.5 Total liabilities 1,317.8 10.2 887.5 2,841.8 (1,115.9) 3,941.4 Investments in JVA 415.1 0.6 198.3 3.1 (54.9) 562.2 Acquisitions of investments and PPE 1,025.5 0.8 4.7 10.7 — 1,041.7 Depreciation and amortisation expenses 21.6 0.5 2.1 2.1 4.1 30.4

30 June 2014 Total assets 7,638.6 54.6 2,069.3 1,685.1 (1,525.9) 9,921.7 Total liabilities 1,912.0 8.1 572.5 2,711.5 (1,458.5) 3,745.6 Investments in JVA 370.1 2.3 217.4 2.8 (55.0) 537.6 Acquisitions of investments and PPE 1,028.7 0.3 4.0 2.4 — 1,035.4 Depreciation and amortisation expenses 21.3 0.5 2.3 1.7 3.8 29.6

MIRVAC GROUP ANNUAL REPORT 2015 41 Notes to the consolidated financial statements

2 Revenue from continuing operations and other income 2015 2014 $m $m

Interest revenue Cash and cash equivalents 5.3 1.7 JVA and related party loans 13.6 20.4 Mezzanine loans 13.7 0.1 Total interest revenue 32.6 22.2

Gain on fair value of derivative financial instruments Gain on interest rate derivatives — 2.9 Gain on cross currency derivatives 187.6 0.1 Total gain on fair value of derivative financial instruments 187.6 3.0

Net gain on sale of assets Net gain on sale of financial instruments 43.8 — Net gain on sale of investments 10.2 — Net gain on sale of investment properties 5.9 — Total net gain on sale of assets 59.9 —

3 Expenses 2015 2014 Profit before income tax includes the following specific expenses: Note $m $m

Interest and finance charges paid/payable net of provision release 136.7 135.7 Amount capitalised 1 (40.3) (35.9) Interest capitalised in current and prior years expensed this year net of provision release 45.8 38.4 Borrowing costs amortised 2.9 6.6 Total finance costs 145.1 144.8

Depreciation Plant and equipment 4.7 4.5 OOP 6.1 5.9 Total depreciation expenses 8 10.8 10.4

Amortisation Lease fitout incentives 9.3 10.3 Lease incentives 10.3 8.9 Total amortisation expenses 19.6 19.2 Total depreciation and amortisation expenses 30.4 29.6

Loss on fair value of derivative financial instruments Loss on cross currency derivatives — 25.5 Loss on interest rate derivatives 15.4 — Loss on revaluation of other financial assets at fair value through profit or loss 0.5 0.8 Total loss on fair value of derivative financial instruments 15.9 26.3

Net loss on sale of assets Net loss on sale of investment properties — 6.0

Other charges against assets Impairment of receivables 10.1 2.2 15.0 Impairment of goodwill 11.2 — 24.5 Impairment of loans, investments and inventories (0.2) (1.2) Rental expense relating to operating leases 4.3 3.9

1) The interest capitalisation rate is primarily derived from the Group’s gearing for developments using the applicable interest rates in note 14.

42 MIRVAC GROUP ANNUAL REPORT 2015 4 Income tax 2015 2014 $m $m a) Income tax expense Income tax expense Current tax 0.4 0.4 Deferred tax 17.6 13.0 Income tax expense 18.0 13.4

Income tax expense is attributable to: Profit from continuing operations 18.0 13.4 Profit from discontinued operations — — Aggregate income tax expense 18.0 13.4

Deferred income tax expense/(benefit) included in income tax expense comprises: Increase in deferred tax assets (60.5) (11.8) Increase in deferred tax liabilities 78.1 24.8 Deferred income tax expense 17.6 13.0 b) Numerical reconciliation of income tax expense to prima facie tax payable Profit before income tax 627.9 460.7 Exclude Group Elimination entries not subject to corporate taxation 1 9.4 (4.8) Exclude Investment segment profit 2 (581.4) (425.4) Profit before tax subject to company income tax 55.9 30.5 Income tax expense calculated at 30 per cent 16.8 9.1 Tax effect of amounts which are not deductible/(taxable) in calculating taxable income Non-assessable impairment write-back of investments including JVA (0.2) — Non-deductible impairment of loans — 4.7 Other non-deductible/non-assessable items 2.2 1.4 18.8 15.2 Over provision in prior years (0.8) (1.8) Income tax expense 3 18.0 13.4

Booked effective tax rate inclusive of prior year over provision 4 32.2% 43.9% c) Tax losses Unused tax and capital gains tax losses incurred by Australian entities for which no deferred tax asset has been recognised 620.6 566.1 Potential tax benefit at 30 per cent 186.2 169.8

1) Group Eliminations not subject to corporate tax generally relate to Investment segment profit restatements required for consolidated group reporting purposes. 2) Investment segment profit represents trust income of MPT. MPT is treated as a flow through vehicle for tax purposes and does not pay tax. Investors pay tax on the taxable income of MPT. 3) The income tax expense represents both current and future income attributable to the financial year. The Mirvac Limited Australian consolidated tax group will pay tax on its taxable profits when it has fully recovered its past accumulated losses. 4) The effective tax rate for 2014 would have been reported at 34 per cent if a deferred tax asset of $4.7m had been recognised on the loan impairments. d) Tax consolidation legislation Mirvac Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003 (refer to note 30(z)). On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the Directors, limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, Mirvac Limited. The entities within the tax consolidated group have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Mirvac Limited for any current tax payable assumed and are compensated by Mirvac Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Mirvac Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements. The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current inter-company receivables/payables.

MIRVAC GROUP ANNUAL REPORT 2015 43 Notes to the consolidated financial statements

4 Income tax / continued 2015 2014 $m $m e) Current tax (liabilities)/assets Tax (payable)/receivable — — f) Net deferred tax assets Non-current assets — deferred tax assets The balance comprises temporary differences attributable to: Unearned profits with associates 11.2 22.1 Accrued expenses 30.6 33.5 Employee benefit provisions 7. 3 6.7 Unearned progress billings 124.9 55.3 Derivative financial instruments 26.5 33.5 Impairment of loans 4.2 7.4 PPE 1.9 1.4 Equity raising costs — 0.1 Tax losses 185.4 191.9 Foreign exchange translation losses 20.9 — Deferred tax assets 412.9 351.9 Non-current liabilities — deferred tax liabilities The balance comprises temporary differences attributable to: Equity accounted investments 3.7 17.1 Inventories 151.4 86.2 Foreign exchange translation gains — 30.5 Derivative financial instruments 55.3 8.6 Other 3.3 1.9 Deferred tax liabilities 213.7 144.3 Net deferred tax assets 199.2 207.6

Deferred tax assets expected to be recovered within 12 months — 12.0 Deferred tax assets expected to be recovered after more than 12 months 412.9 339.9 412.9 351.9 g) Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in profit or loss or other comprehensive income but directly credited to equity: Deferred tax — credited directly to equity — 0.4 — 0.4 h) Tax expense/(benefit) relating to items of other comprehensive income Exchange differences on translation of foreign operations 1.4 (0.1) 1.4 (0.1)

44 MIRVAC GROUP ANNUAL REPORT 2015 4 Income tax / continued Movements in deferred tax Foreign Equity exchange Unearned Unearned Derivative accounted translation profits with progress financial Impairment investments (gains)/losses associates billings instruments of loans PPE $m $m $m $m $m $m $m

Balance 1 July 2013 (10.5) (28.6) 18.1 97.0 22.1 5.4 1.3 Credited/(charged) to profit or loss (6.6) (2.0) 4.0 (41.7) 2.8 2.0 0.1 Credited/(charged) to other comprehensive income — 0.1 — — — — — Charged to equity — — — — — — — Acquisition/disposal of controlled entity — — — — — — — Closing balance 30 June 2014 (17.1) (30.5) 22.1 55.3 24.9 7.4 1.4 Credited/(charged) to profit or loss 3.9 52.8 (10.9) 67.7 (53.7) (3.2) 0.5 Credited/(charged) to other comprehensive income — (1.4) — — — — — Charged to equity — — — — — — — Acquisition/disposal of controlled entity — — — 1.9 — — — Credited to other liabilities 9.5 — — — — — — Closing balance 30 June 2015 (3.7) 20.9 11.2 124.9 (28.8) 4.2 1.9

Equity Employee raising Accrued benefit costs Inventories expenses provisions Tax losses Other Total $m $m $m $m $m $m $m

Balance 1 July 2013 0.2 (79.0) 23.9 6.0 165.7 (1.5) 220.1 Credited/(charged) to profit or loss (0.1) (7.2) 9.6 0.7 25.8 (0.4) (13.0) Credited/(charged) to other comprehensive income — — — — — — 0.1 Charged to equity — — — — 0.4 — 0.4 Acquisition/disposal of controlled entity — — — — — — — Closing balance 30 June 2014 0.1 (86.2) 33.5 6.7 191.9 (1.9) 207.6 Credited/(charged) to profit or loss (0.1) (64.4) (2.9) 0.6 (6.5) (1.4) (17.6) Credited/(charged) to other comprehensive income — — — — — — (1.4) Charged to equity — — — — — — — Acquisition/disposal of controlled entity — (3.1) — — — — (1.2) Credited to other liabilities — 2.3 — — — — 11.8 Closing balance 30 June 2015 — (151.4) 30.6 7.3 185.4 (3.3) 199.2

5 EPS 2015 2014 Cents Cents

Earnings per stapled security Basic EPS 16.51 12.19 Diluted EPS 1 16.50 12.17

Basic and diluted earnings $m $m

Profit attributable to the stapled securityholders of Mirvac used in calculating EPS 609.9 447. 3

Number Number Weighted average number of securities used as denominator m m

Weighted average number of securities used in calculating basic EPS 3,693.1 3,669.5 Adjustment for calculation of diluted EPS Securities issued under EIS 3.5 4.7 Weighted average number of securities used in calculating diluted EPS 1 3,696.6 3,674.2

1) Diluted securities include securities issued under the EIS, but do not include the options and rights issued under the current LTI plans as the exercise of these equity instruments is contingent on conditions during the vesting period.

MIRVAC GROUP ANNUAL REPORT 2015 45 Notes to the consolidated financial statements

OPERATING ASSETS AND LIABILITIES 6 Investment properties Investment properties comprised land and buildings held for long term rental yields, for capital appreciation and are not occupied by the Group. Revenue from the rental yields is included in the consolidated SoCI under investment properties rental revenue. Total rental revenue for the year was $618.4m (2014: $650.9m). Investment properties are carried at fair value (book value in the following table). Refer to note 6(c) for the valuation basis of the fair value measurement. Capitalisation Book value rate Discount rate Last 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun Date of external Date of 2015 2014 2015 2014 2015 2014 last external valuation acquisition $m $m % % % % valuation $m

1 Darling Island, Pyrmont NSW Apr 2004 195.8 188.9 6.75 7.00 8.25 8.75 Dec 2014 188.9 1 Woolworths Way, Bella Vista NSW 1 Aug 2010 250.2 250.0 7.75 7.75 8.50 8.88 Dec 2014 250.0 1-47 Percival Road, Smithfield NSW Nov 2002 35.9 32.5 7.50 8.00 8.75 9.50 Dec 2013 31.0 10-20 Bond Street, Sydney NSW (50% interest) 1 Dec 2009 200.0 192.8 6.38 6.63 8.00 8.50 Jun 2015 200.0 101-103 Miller Street & Greenwood Plaza, North Sydney NSW (50% interest) Jun 1994 302.7 289.3 6.25-6.37 6.50-6.75 8.25-8.75 8.50-8.75 Dec 2014 300.0 16 Furzer Street, Phillip ACT Jul 2007 68.0 69.0 7.75 7.75 8.75 9.00 Dec 2013 69.0 189 Grey Street, Southbank QLD Apr 2004 83.1 82.2 7.63 7.63 8.50 9.00 Dec 2013 79.0 1900-2060 Pratt Boulevard, Chicago Illinois USA Dec 2007 45.1 36.0 7.25 7.25 8.50 8.50 Dec 2013 36.0 191-197 Salmon Street, Port Melbourne VIC 2 Jul 2003 — 77.5 — 9.75 — 10.00 Jun 2014 77.5 210 George Street, Sydney NSW 2 May 2013 — 26.0 — 7.75 — 8.75 Jun 2014 26.0 220 George Street, Sydney NSW 2 May 2013 — 57.0 — 8.00 — 8.75 Jun 2014 57.0 23 Furzer Street, Phillip ACT Feb 2010 252.1 247.0 7.25 7. 35 8.50 8.75 Dec 2013 246.5 271 Lane Cove Road, North Ryde NSW Apr 2000 32.3 31.4 8.25 8.25 9.00 9.25 Jun 2014 31.4 275 Kent Street, Sydney NSW (50% interest) 1,3 Aug 2010 435.6 435.0 6.00 6.00 8.50 8.50 Jun 2012 792.0 3 Rider Boulevard, Rhodes NSW 1 Dec 2009 89.0 89.1 8.00 8.00 8.75 8.75 Dec 2014 88.4 34-39 Anzac Avenue, Smeaton Grange NSW 4 Jan 2015 23.3 — 8.00 — 9.00 — — — 340 Adelaide Street, Brisbane QLD 1 Dec 2009 55.5 55.3 8.75 8.75 8.75 9.25 Dec 2014 55.0 367 Collins Street, Melbourne VIC Nov 2013 238.5 228.0 6.50 7.00 8.25 8.75 Jun 2015 238.5 37 Pitt Street, Sydney NSW May 2013 68.0 68.0 8.00 8.00 8.75 8.75 Jun 2014 68.0 380 St Kilda Road, Melbourne VIC Oct 1995 (50%) & Apr 2001 (50%) 140.2 127.7 7. 25 8.00 8.25 9.00 Jun 2015 140.2 39 Britton Steet, Smithfield NSW 4 Jan 2015 21.1 — 7.25 — 8.75 — — — 39 Herbert Street, St Leonards NSW 4 Jan 2015 153.5 — 6.75 — 8.75 — — — 40 Miller Street, North Sydney NSW Mar 1998 114.1 106.4 6.75 7.25 8.50 8.75 Jun 2014 106.4 47-67 Westgate Drive, Altona North VIC 1 Dec 2009 18.7 19.1 9.50 9.50 9.75 9.75 Dec 2013 19.1 472 Pacific Highway, St Leonards NSW 4 Jun 2015 63.1 — — — — — — — 477 Collins Street, Melbourne VIC Nov 2013 72.0 72.0 7.00 7.50 8.25 8.75 Jun 2015 72.0 486 Pacific Highway, St Leonards NSW 4 Jun 2015 58.3 — — — — — — — 5 Rider Boulevard, Rhodes NSW Jan 2007 133.6 130.4 7.75 7.75 8.75 8.75 Dec 2014 133.0 51 Pitt Street, Sydney NSW May 2013 26.0 26.0 8.00 8.00 8.75 8.75 Jun 2014 26.0 54 Marcus Clarke Street, Canberra ACT 2 Oct 1987 — 14.1 — 9.75 — 10.50 Dec 2014 12.9 55 Coonara Avenue, West Pennant Hills NSW 1 Aug 2010 70.0 70.0 9.50 9.50 9.75 10.00 Jun 2014 70.0 6-8 Underwood Street, Sydney NSW May 2013 9.5 9.5 9.00 9.00 9.00 9.00 Jun 2014 9.5 60 Marcus Clarke Street, Canberra ACT 2 Sep 1989 — 48.5 — 8.75 — 9.50 Jun 2013 48.5 60 Wallgrove Road, Eastern Creek NSW Jan 2014 55.7 55.1 6.00-9.00 6.50-9.50 9.00-10.50 9.00-10.50 Jun 2014 55.1 65 Pirrama Road, Pyrmont NSW Jun 2001 126.6 115.0 7.00 7.50 8.25 8.75 Dec 2013 110.0 699 Bourke Street, Melbourne VIC Nov 2007 (50%) (50% interest) 5 & May 2011 (50%) 77.0 — 6.13 — 8.25 — Jun 2015 77.0 77 St Georges Terrace, Perth WA May 2013 227.7 237.0 8.00 8.00 9.25 9.25 Jun 2014 237.0 8 Brabham Drive, Huntingwood NSW 4 Jan 2015 19.7 — 7.00 — 8.75 — — — 90 Collins Street, Melbourne VIC May 2013 185.0 175.5 6.50 6.75 8.25 8.75 Jun 2014 175.5 Birkenhead Point Outlet Centre, Drummoyne NSW 4 Dec 2014 320.7 — 6.25-8.00 — 8.50-9.50 — Jun 2015 320.7 Broadway Shopping Centre, Broadway NSW (50% interest) 6 Jan 2007 292.1 280.0 6.00 6.00 8.75 8.75 Jun 2014 280.0 Cherrybrook Village Shopping Centre, Cherrybrook NSW 1 Dec 2009 91.0 86.7 7.00 7.25 8.75 9.25 Jun 2015 91.0 City Centre Plaza, Rockhampton QLD 1,2 Dec 2009 — 44.0 — 8.00 — 9.25 Jun 2013 49.0

46 MIRVAC GROUP ANNUAL REPORT 2015 6 Investment properties / continued Capitalisation Book value rate Discount rate Last 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun Date of external Date of 2015 2014 2015 2014 2015 2014 last external valuation acquisition $m $m % % % % valuation $m

Como Centre, Cnr Toorak Road & Chapel Street, South Yarra VIC Aug 1998 179.5 168.3 7.50-8.00 8.00-8.36 8.25-12.00 9.00-11.00 Jun 2015 179.5 Cooleman Court, Weston ACT 1 Dec 2009 52.4 52.0 7.50 7.50 9.00 9.00 Dec 2013 53.0 Harbourside Shopping Centre, Darling Harbour NSW Jan 2014 262.0 252.0 6.50 6.75 9.00 8.75 Dec 2014 255.0 Hinkler Central, Bundaberg QLD 2 Aug 2003 — 93.2 — 7.75 — 9.50 Dec 2014 99.0 Hoxton Distribution Park, Hoxton Park NSW (50% interest) Jul 2010 131.7 114.1 6.00 6.50 8.00 9.25 Jun 2015 131.7 Kawana Shoppingworld, Dec 1993 (50%) Buddina QLD & Jun 1998 (50%) 322.0 299.8 6.25 6.50 8.75 9.00 Dec 2014 311.0 Moonee Ponds Central, May 2003 Moonee Ponds VIC & Feb 2008 68.6 67.0 7.75 7.75 9.00 9.00 Jun 2014 67.0 Nexus Industry Park (Building 1), Lyn Parade, Prestons NSW Aug 2004 21.6 20.5 7.25 7.75 8.75 9.25 Jun 2015 21.6 Nexus Industry Park (Building 2), Lyn Parade, Prestons NSW Aug 2004 14.6 13.1 7.25 7.75 8.75 9.25 Dec 2014 13.5 Nexus Industry Park (Building 3), Lyn Parade, Prestons NSW Aug 2004 27.5 26.1 7.50 8.00 8.75 9.25 Jun 2015 27.5 Nexus Industry Park (Building 4), Lyn Parade, Prestons NSW Aug 2004 39.7 38.2 7.25 7.50 8.75 9.25 Dec 2013 35.8 Nexus Industry Park (Building 5), Lyn Parade, Prestons NSW Aug 2004 20.6 19.5 7.25 7.50 8.75 9.25 Dec 2014 19.8 Orion Springfield Central, Springfield QLD 7 Aug 2002 235.0 138.8 6.50 6.75 9.00 9.25 Dec 2014 143.0 Quay West Car Park, 109-111 Harrington Street, Sydney NSW Nov 1989 30.0 29.3 7.25 8.25 9.25 10.00 Jun 2015 30.0 Rhodes Waterside, Rhodes NSW (50% interest) Jan 2007 149.0 130.4 6.25 7.00 8.50 9.25 Jun 2015 149.0 Riverside Quay, Southbank VIC 8 Apr 2002 & Jul 2003 193.1 208.5 7.50 7.50-7.75 8.75 9.00-10.25 Dec 2013 199.3 St Marys Village Centre, St Marys NSW Jan 2003 48.2 46.0 7.25 7.75 9.00 9.00 Dec 2014 47.0 Stanhope Village, Stanhope Gardens NSW Nov 2003 116.0 101.6 7.0 0 7.25 9.00 9.00 Dec 2013 97.0 Total investment properties 6,562.2 5,890.4

IPUC 2 Riverside Quay, Southbank VIC (50% interest) 8 Apr 2002 23.7 — 6.13 — 8.50 — — — 200 George Street, Sydney NSW (50% interest) Dec 2012 133.5 68.6 6.00 6.50 8.00 8.75 Dec 2014 92.9 699 Bourke Street, Melbourne VIC Nov 2007 (50%) (50% interest) 5 & May 2011 (50%) — 20.4 — 6.50 — 9.00 — — Orion Springfield land, Springfield QLD 7 Aug 2002 21.6 37.0 — 6.50-9.50 — 9.25-10.25 Dec 2014 73.4 Tramsheds, Harold Park NSW 9 Dec 2010 10.1 — 6.75 — 8.75 — — — Total IPUC 188.9 126.0 —

Total investment properties and IPUC 6,751.1 6,016.4 —

1) Date of acquisition represents business combination acquisition date. 2) Investment property disposed of during the year. 3) Last external valuation represents 100 per cent interest, prior to sale of 50 per cent interest on 1 July 2014. No external valuation since June 2012, as sale price on 1 July 2014 was considered as fair value. 4) Investment property acquired during the year. 5) Investment property reached practical completion during the year and was reclassified from IPUC. 6) Includes 52-60 Francis Street, Glebe NSW (50% interest), acquired during the year. 7) Stage 2 of Orion Springfield Central development now included as investment property in main centre. Remaining land now valued on a direct comparison basis. 8) 50 per cent of 2 Riverside Quay, Southbank VIC was disposed of during the year. The remaining 50 per cent was reclassified as IPUC. 9) Date of acquisition of Harold Park site. Construction of investment property commenced during the year.

MIRVAC GROUP ANNUAL REPORT 2015 47 Notes to the consolidated financial statements

6 Investment properties / continued a) Reconciliation of carrying amounts of investment properties 2015 2014 At fair value $m $m

Balance 1 July 6,016.4 6,029.6 Additions 328.2 215.5 Acquisitions 685.5 643.1 Disposals (401.3) (149.1) Net gain on fair value of investment properties and IPUC 140.8 48.8 Net gain/(loss) from foreign currency translation 8.1 (0.9) Assets classified as held for sale — (821.0) Transfers from inventories 4.1 20.1 Transfers from OOP — 60.0 Amortisation of lease fitout incentives, leasing costs and rent incentive (30.7) (29.7) Balance 30 June 6,751.1 6,016.4 b) Amounts recognised in the consolidated SoCI for investment properties Investment properties rental revenue 618.4 650.9 Investment property expenses (142.9) (159.2) 475.5 491.7 c) Fair value measurement and valuation basis i) Investment properties Investment properties are carried at fair value. Valuation methods used to determine the fair value include market sales comparison, DCF and capitalisation rate (“CR”). The fair value for a property may be determined by using a combination of these and other valuation methods. Market sales comparison: The sales comparison approach utilises recent sales of comparable properties, adjusted for any differences including the nature, location and lease profile, to indicate the fair value of a property. Where there is a lack of recent sales activity, adjustments are made from previous comparable sales to reflect changes in economic conditions. DCF: DCF projections derived from contracted rents, market rents, operating costs, lease incentives, lease fees, capital expenditure and future income on vacant space are discounted at a rate to arrive at a value. The discount rate is a market assessment of the risk associated with the cash flows, and the nature, location and tenancy profile of the property relative to returns from alternative investments, CPI rates and liquidity risk. It is assumed that the property is sold at the end of the investment period at a terminal value. The terminal value is determined by using an appropriate terminal CR. Mirvac’s terminal CR is in the range of an additional nil to 100 basis points above the respective property’s CR. CR: An assessment is made of fully leased net income based on contracted rents, market rents, operating costs and future income on vacant space. The adopted fully leased net income is capitalised in perpetuity from the valuation date at an appropriate CR. The CR reflects the nature, location and tenancy profile of the property together with current market investment criteria, as evidenced by current sales evidence. Various adjustments, including incentives, capital expenditure, and reversions to market rent, are made to arrive at the property value. ii) IPUC There are generally no active markets for IPUC; therefore, a lack of comparable transactions for IPUC usually requires the use of estimation models. The two main estimation models used to value IPUC are residual and DCF valuations. The residual method of determining the value of a property uses the estimated total cost of the development, including construction and associated expenditures, finance costs, and an allowance for developer’s risk and profit is deducted from the end value of the completed project. The resultant figure is then adjusted back to the date of valuation to give the residual value. AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: — quoted prices (unadjusted) in active markets for identical assets or liabilities (level one); — inputs other than quoted prices included within level one that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level two); and — inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level three).

48 MIRVAC GROUP ANNUAL REPORT 2015 6 Investment properties / continued DCF and CR both use unobservable inputs in determining fair value; ranges of the inputs are included below: Inputs used to measure fair value

10 year market rent compound Net market annual Terminal Discount Fair value Fair value income growth rate CR yield rate Sector hierarchy $m $ 1 % 1 % % %

Office 2 Level three 3,898.8 205-1,003 0.00-4.10 6.00-9.50 6.25-10.00 8.00-9.75 Industrial Level three 661.0 15-345 2.33-3.30 6.00-9.50 6.25-9.75 8.00-9.75 Retail 2 Level three 2,103.6 221-1,071 3.00-4.43 6.00-8.00 6.25-8.00 8.50-9.50 Other 3 Level three 87.7 — 1.88-3.35 7.25-8.00 7.50-9.00 9.25-12.00

1) Square metre. 2) Includes IPUC. 3) Net market income for Other sector (Car Parks and Hotel) not reported on a square metre basis. d) Sensitivity on changes in fair value of investment property Fair value measurement sensitivity Fair value measurement sensitivity Significant inputs to significant increase in input to significant decrease in input

Net market income Increase Decrease 10 year market rent compound annual growth rate Increase Decrease CR Decrease Increase Terminal yield Decrease Increase Discount rate Decrease Increase Movement in any of the unobservable inputs is likely to have an impact on the fair value of investment property. The higher the net market rent and 10 year market rent compound annual growth rate, the higher the fair value. The higher the CR, terminal yield and discount rate, the lower the fair value. e) Highest and best use For all investment properties, the current use equates to the highest and best use. f) Non-current assets pledged as security There are no non-current assets pledged as security by the Group. g) Property portfolio Mirvac’s property portfolio is made up as follows: 2015 2014 Note $m $m

Investment properties per consolidated SoFP 6,751.1 6,016.4 Properties classified as assets held for sale 7 — 821.0 OOP classified as PPE 8 244.3 238.6 6,995.4 7,076.0

7 Assets classified as held for sale and discontinued operations a) Assets classified as held for sale 2015 2014 $m $m

Non-current assets held for sale 1 Castlereagh Street, Sydney NSW 1 — 69.4 10 Julius Avenue, North Ryde NSW 1 — 51.4 12 Julius Avenue, North Ryde NSW 1 — 21.3 275 Kent Street, Sydney NSW (50%) 1 — 435.0 33 Corporate Drive, Cannon Hill QLD 1 — 15.2 38 Sydney Avenue, Forrest ACT 1 — 35.5 339 Coronation Drive, Milton QLD 1 — 53.7 Waverley Gardens Shopping Centre, Mulgrave VIC 1 — 139.5 — 821.0

1) Settlement occurred on 1 July 2014. As part of the Group’s strategy, investment properties that no longer meet the investment criteria and are subject to a contract for sale, are classified as held for sale. i) Non-recurring fair value measurements Investment property classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. The fair value of the investment properties was determined using the market sales comparison approach as described in note 6. This is a level three measurement as per the fair value hierarchy set out in note 15.

MIRVAC GROUP ANNUAL REPORT 2015 49 Notes to the consolidated financial statements

8 PPE PPE comprises mainly plant and equipment and OOP. The different classes of assets are grouped in a similar nature and use in the Group’s operation. Items included in plant and equipment are stated at cost (or deemed cost) less accumulated depreciation. Items included in OOP are shown at fair value, less subsequent depreciation for buildings. OOP is primarily an investment property held for long term rental yields and capital appreciation. It is classified as PPE because of Mirvac’s tenancy in the property and under Australian Accounting Standards OOP is considered as PPE. Refer to note 30(p)(ii) for further detail. Plant and Leased plant equipment OOP and equipment Total $m $m $m $m

2015 Balance 1 July 9.6 238.6 0.5 248.7 Revaluation increment — 11.8 — 11.8 Additions 12.7 — — 12.7 Disposals (0.5) — — (0.5) Depreciation expenses (4.7) (6.1) — (10.8) Balance 30 June 17.1 244.3 0.5 261.9

2015 Cost or fair value 41.8 288.4 0.5 330.7 Accumulated depreciation (24.7) (44.1) — (68.8) Net book amount 17.1 244.3 0.5 261.9

2014 Balance 1 July 11.1 306.7 — 317.8 Revaluation decrement — (2.2) — (2.2) Additions 3.2 — 0.5 3.7 Transfers to other assets 1 — (60.0) — (60.0) Disposals (0.2) — — (0.2) Depreciation expenses (4.5) (5.9) — (10.4) Balance 30 June 9.6 238.6 0.5 248.7

2014 Cost or fair value 32.5 276.6 0.5 309.6 Accumulated depreciation (22.9) (38.0) — (60.9) Net book amount 9.6 238.6 0.5 248.7

1) Transfers out relate to 340 Adelaide Street, Brisbane QLD being reclassified as investment property as it no longer satisfies the criteria for OOP. A reconciliation of the revaluation increment/(decrement) and the asset revaluation reserve (“ARR”) is shown in note 20(d). a) Fair value measurement and valuation basis of OOP OOP is revalued by external valuers on a rotation basis with approximately one-half of the portfolio investment property and OOP portfolio being valued annually. The basis of valuation of OOP is fair value; for information about the methods and assumptions used in determining the fair value of OOP, refer to note 6. The valuation basis is consistent with the approach taken for investment properties (refer to note 6(c)(i)). Discount rates range from 8.25 to 8.75 per cent (2014: 8.50 to 10.50 per cent) and CR range from 6.50 to 6.88 per cent (2014: 6.00 to 9.50 per cent). The revaluation increment net of applicable deferred income taxes was credited to the ARR in equity (refer to note 20(b)). b) Historical cost of items carried at fair value 2015 2014 OOP $m $m

Balance 30 June 213.0 210.6

50 MIRVAC GROUP ANNUAL REPORT 2015 9 Inventories Inventories comprise development projects and construction contracts. Development projects are valued at lower of cost and NRV and construction work-in-progress is stated at the aggregate of contract costs incurred to date plus recognised profits less recognised losses and progress billings. 2015 2014 $m $m

Current 1 Development projects Acquisition costs 218.7 202.1 Development costs 542.9 362.6 Borrowing costs capitalised during development 46.2 62.8 Provision for loss (33.6) (29.4) 774.2 598.1 Construction work in progress (amount due from customers for contract work) Contract costs incurred and recognised profits less recognised losses — 126.0 Progress billings — (126.0) — — Total current inventories 774.2 598.1

Non-current 1 Development projects Acquisitions costs 661.0 609.4 Development costs 293.0 283.0 Borrowing costs capitalised during development 113.5 120.4 Provision for loss (128.3) (153.7) Total non-current inventories 939.2 859.1

Aggregate carrying amount of inventories Current 774.2 598.1 Non-current 939.2 859.1 Total inventories 1,713.4 1,457.2

1) Lower of cost and NRV. a) Inventories expense Inventories expensed as cost of property development and construction during the year ended 30 June 2015 amounted to $784.7m (2014: $940.7m). During the year, there was no amount (2014: $nil) expensed as provision for loss on inventories. b) Current and non-current inventories The disclosure of inventories as either current or non-current is determined by the period within which they are expected to be realised. Inventories disclosed as current are expected to be realised within 12 months; all other inventories are expected to be realised beyond 12 months from the reporting date. 10 Financial assets and liabilities 10.1 Receivables Provision for Gross impairment Net $m $m $m

30 June 2015 Current Trade receivables 23.9 (0.4) 23.5 Amounts due from related parties 21.0 (0.3) 20.7 Amounts due from unrelated parties 8.9 (0.8) 8.1 Mezzanine loans 12.2 (12.2) — Accrued income 11.5 — 11.5 Other receivables 11.8 (2.6) 9.2 89.3 (16.3) 73.0

Non-current Amounts due from related parties 48.1 (24.5) 23.6 Other receivables 66.2 (33.0) 33.2 114.3 (57.5) 56.8

MIRVAC GROUP ANNUAL REPORT 2015 51 Notes to the consolidated financial statements

10 Financial assets and liabilities / continued Provision for Gross impairment Net $m $m $m

30 June 2014 Current receivables Trade receivables 22.3 (0.1) 22.2 Loans to directors and employees 2.0 — 2.0 Amounts due from related parties 13.6 (0.3) 13.3 Amounts due from unrelated parties 47.4 (16.6) 30.8 Mezzanine loans 12.2 (12.2) — Accrued income 17.3 — 17.3 Other receivables 14.3 (1.2) 13.1 129.1 (30.4) 98.7

Non-current receivables Loans to directors and employees 0.3 — 0.3 Amounts due from related parties 56.7 (24.2) 32.5 Other receivables 60.7 (33.0) 27.7 117.7 (57.2) 60.5

Further information in relation to loans to KMP is set out in the Remuneration report and amounts due from related parties is set out in note 26. a) Trade receivables The average credit period on sales of goods is 30 days. No interest is charged on any outstanding trade receivables. Refer to note 10.1(d) for details regarding the credit risk of receivables. b) Other receivables These amounts generally arise from transactions outside of the classification of trade receivables such as GST receivables and other sundry debtors. c) Provision for impairment of receivables Movements in the provision for impairment of receivables are detailed below: 2015 2014 $m $m

Balance 1 July (87.6) (96.1) Amounts written off 16.0 23.5 Provision for impairment recognised (2.2) (15.0) Balance 30 June (73.8) (87.6)

Mirvac has written off $16.0m (2014: $23.5m) of impairment against receivables during the current year. This relates to a loan to an unrelated party that was previously provided for impairment and management had assessed that it is now non-recoverable (2014: two mezzanine loans and a loan to a related party). This loss has been applied against the provision for impairment of receivables. The creation and release of the provision for impaired receivables have been included in impairment of loans in profit or loss where these relate to the mezzanine loans and loan to a related party, and have been included in other expenses in profit or loss where these relate to the impairment of trade receivables. d) Credit risk Receivables consist of a large number of customers. Mirvac does not have any significant credit risk exposure to a single customer or groups of customers. Ongoing credit evaluation is performed on the financial condition of customers and, where appropriate, a provision for impairment of receivables is raised. Mirvac holds collateral in certain circumstances which takes the form of bank guarantees, security deposits, personal guarantee or a mortgage over property until completion. The ageing of receivables is detailed below: 2015 2014

Total Provision for Total Provision for receivables impairment receivables impairment $m $m $m $m

Not past due 161.4 (38.5) 191.9 (36.6) Renegotiated — — — — Past due 1—30 days 5.9 — 2.5 — Past due 31—60 days 0.6 — 0.6 — Past due 61—90 days 0.3 (0.1) 0.2 — Past due 91—120 days 0.2 (0.1) 0.2 — Past 120 days 35.2 (35.1) 51.4 (51.0) Total 203.6 (73.8) 246.8 (87.6)

52 MIRVAC GROUP ANNUAL REPORT 2015 10 Financial assets and liabilities / continued Under certain circumstances, Mirvac has not provided for all balances past due as it has been determined that there has not been a significant change in credit quality at the end of the reporting period based upon the customer’s payment history and analysis of the customer’s financial accounts. The Group holds collateral over receivables of $286.4m (2014: $288.3m). The fair value of the collateral held equals the fair value of the receivables for which the collateral is held. The terms of the collateral are if payment due is not received per the agreed terms, Mirvac is able to claim the collateral held. e) Impairment and risk exposures Refer to note 30(j) for information about the impairment of trade receivables and their credit quality and note 30(n) for impairment of other receivables. Refer to note 14 for Mirvac’s exposure to foreign currency risk, interest rate risk and credit risk. f) Fair values of trade and other receivables Due to the short term nature of the current receivables, their carrying amount (less impairment provision) is assumed to be the same as their fair value. For the majority of the non-current receivables, the carrying amount is also not significantly different to their fair value. 10.2 Payables 2015 2014 $m $m

Current Trade payables 95.6 79.0 Employee benefits 11.8 9.8 Deferred revenue 1 320.7 128.0 Accruals 202.2 185.1 Deferred payment for land 26.0 55.2 Other creditors 15.9 45.8 Amounts due to related parties 0.9 2.2 673.1 505.1

Non-current Deferred revenue 1 28.9 24.5 Deferred payment for land 55.5 35.5 Other creditors 29.1 25.0 113.5 85.0

1) Deferred revenue includes payments received in respect of development contracts that do not meet the requirements to be accounted for as construction contracts. Trade payables are unsecured and are usually paid within 30 days of recognition. a) Fair values of payables The carrying amounts of trade and other payables are assumed to be the same as their fair values due to their short term nature. 11 Other non-financial assets and liabilities 11.1 Other assets 2015 2014 $m $m

Prepayments 21.4 22.5 Monies held in trust 0.2 0.2 21.6 22.7

Monies held in trust relate to deposits received in respect of future sales of inventories. 11.2 Intangible assets Management rights Goodwill Total $m $m $m

2015 Balance 1 July 2.6 36.4 39.0 Balance 30 June 2.6 36.4 39.0

2014 Balance 1 July 2.6 63.1 65.7 Impairment of goodwill — (24.5) (24.5) Derecognition of goodwill — (2.2) (2.2) Balance 30 June 2.6 36.4 39.0

MIRVAC GROUP ANNUAL REPORT 2015 53 Notes to the consolidated financial statements

11 Other non-financial assets and liabilities / continued a) Allocation of intangible assets by operating segment A segment level summary of the intangible asset allocations is presented below: Investment Investment Management Total $m $m $m

2015 Management rights — indefinite life 1 — 2.6 2.6 Goodwill 36.4 — 36.4 Balance 30 June 36.4 2.6 39.0

2014 Management rights — indefinite life 1 — 2.6 2.6 Goodwill 36.4 — 36.4 Balance 30 June 36.4 2.6 39.0

1) Management rights are primarily held in relation to funds established or rights established by entities acquired by Mirvac. These funds are considered to be open-ended and therefore have no expiry. The Group also holds strategic stakes in these funds in order to protect its interests. b) Key assumptions used for value in use calculations for goodwill and other intangible assets The recoverable amount of cash generating units (“CGUs”) is determined using the higher of fair value less costs to sell, and their value in use. Mirvac uses the value in use calculation which is based on financial budgets and forecasts approved by management covering a five year period. For the Investment Management CGU, cash flows beyond the five year period are extrapolated using the estimated growth rates stated below. For the Investment CGU, no forecast growth rate is assumed as the value in use calculations are based on forecast cash flows from existing projects and investment properties. The key assumptions used to determine the forecast cash flows included net market rent, capital expenditure, CR, growth rate, discount rate, and market conditions. The growth rate has been adjusted to reflect current market conditions and does not exceed the long term average growth rate for the business in which the CGU operates. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments and the countries in which they operate. A terminal growth rate of three per cent has also been applied. Growth rate 1 Discount rate Growth rate 1 Discount rate 2015 2015 2014 2014 CGU % pa % pa % pa % pa

Investment — 2 8.6 — 2 8.9 Investment Management 1.0 13.0 1.0 13.0

1) Weighted average growth rate used to extrapolate cash flows beyond the budget period. 2) The value in use calculation is based on financial budgets and forecasts approved by management covering a five year period. No forecast growth rate is assumed as the value in use calculations are based on forecast cash flows from existing projects and investment properties. The recoverable amount of goodwill exceeds the carrying value at 30 June 2015. Based on the information available on the key assumptions and market conditions at 30 June 2015, Management has considered and assessed reasonable possible changes on the key assumptions and has not identified any instances that could cause the carrying value to exceed the recoverable amount of goodwill. As the CGU’s primarily consist of investment property, assumptions considered are the unobservable inputs used in determining fair value of investment property. For further information on the impact of a significant change in an unobservable input refer to note 6(d). c) Impairment of goodwill There was no impairment of goodwill (2014: $24.5m). d) Impairment of intangible assets There was no impairment of management rights (2014: $nil). Management rights are primarily held in relation to funds established or rights established by entities acquired by Mirvac. These funds are considered to be open-ended and therefore have no expiry. 11.3 Provisions 2015 2014 Current Non-current Total Current Non-current Total $m $m $m $m $m $m

Employee benefits — LSL 9.1 3.2 12.3 8.4 3.2 11.6 Dividends/distributions payable 181.2 — 181.2 169.8 — 169.8 Restructuring costs 1 5.4 — 5.4 — — — Warranties 5.8 8.8 14.6 — — — Asset retirement obligation — — — — 0.3 0.3 Other — 5.1 5.1 — — — 201.5 17.1 218.6 178.2 3.5 181.7

1) Includes employee severance costs of $3.9m.

54 MIRVAC GROUP ANNUAL REPORT 2015 11 Other non-financial assets and liabilities / continued Movements in each class of provision during the year, other than employee benefits, are set out below: Dividends/ Asset distributions Restructuring retirement payable 1 costs 2 Warranties 3 obligation 4 Other Total $m $m $m $m $m $m

2015 Balance 1 July 169.8 — — 0.3 — 170.1 Transfer in — — 17.6 — 5.1 22.7 Additional provisions 347.6 5.4 4.6 — — 357. 6 Payments made/amounts utilised during the year (336.2) — (7.6) — — (343.8) Release of provision — — — (0.3) — (0.3) Balance 30 June 181.2 5.4 14.6 — 5.1 206.3

2014 Balance 1 July 164.9 — — 0.4 — 165.3 Additional provisions 331.1 — — 0.3 — 331.4 Payments made/amounts utilised during the year (326.2) — — — — (326.2) Release of provision — — — (0.4) — (0.4) Balance 30 June 169.8 — — 0.3 — 170.1

1) The amounts reported in the provision include dividends/distributions paid/payable to securityholders of the Group. 2) Provisions are recognised for restructuring activities when a detailed plan has been developed and a valid expectation that the plan will be carried out is held by those affected by it. On 25 June 2015, Mirvac announced a change in the Group’s organisational structure and the decision to outsource certain finance related activities to an offshore provider and to downsize a number of corporate and business functions. 3) Warranties relate to the Group’s obligation to rectify any defective work during the warranty period of its developments, known as post-completion maintenance costs. Previously, given the smaller number of development projects and greater certainty around the liability due to the nature of the project the Group had classified these as accruals, refer to note 10.2. However, given the increase in Development activity including commercial projects, there is less historical knowledge to base an accrual and significant uncertainty around the amount of future expenditure required to cover these maintenance works and when they will be incurred. Given this, management has decided to reclassify these from accruals to provisions. There has been no change in the spilt between current and not-current. 4) The asset retirement obligation relates to obligations under lease agreements for space on expiry of the lease, to return it to its condition at the commencement of the lease. 11.4 Other liabilities 2015 2014 $m $m

Monies held in trust 0.2 0.2

CAPITAL STRUCTURE 12 Borrowings a) Borrowings 2015 2014 Note $m $m

Current Unsecured Domestic medium term notes (“MTN”) 12(a)(ii) — 200.0 Secured Lease liabilities 12(a)(iii) 0.2 2.9 0.2 202.9

2015 2014 Note $m $m

Non-current Unsecured Bank loans 12(a)(i) 920.2 975.2 Domestic MTN 12(a)(ii) 625.0 625.0 Foreign MTN 12(a)(iv) 1,088.4 914.3 Secured Lease liabilities 12(a)(iii) 0.1 0.2 2,633.7 2,514.7

MIRVAC GROUP ANNUAL REPORT 2015 55 Notes to the consolidated financial statements

12 Borrowings / continued i) Bank loans Mirvac has unsecured bank facilities totalling $1,400.0m (2014: $1,388.2m). The facility contains five tranches: a $200.0m tranche maturing in September 2016, a $350.0m tranche maturing in September 2017, a $300.0m tranche maturing in September 2018, a $300.0m tranche maturing in September 2019, and a $250.0m tranche maturing in September 2020. Subject to compliance with the terms, each of these bank loan facilities may be drawn at any time. ii) Domestic MTN Mirvac has a total of $625.0m (2014: $825.0m) of domestic MTN outstanding: $225.0m maturing in September 2016, $200.0m maturing in December 2017 and $200.0m maturing in September 2020. Interest is payable either quarterly or semi-annually in arrears in accordance with the terms of the notes. iii) Lease liabilities Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. iv) Foreign MTN Mirvac has a total of $1,019.8m (US$735.0m and $135.0m) (2014: $1,019.8m) US Private Placement notes outstanding. The notes mature as follows: — US$275.0m and $10.0m maturing in November 2016; — US$100.0m maturing in November 2018; — US$160.0m and $50.0m maturing in December 2022; — US$105.0m and $25.0m maturing in December 2024; and — US$95.0m and $50.0m maturing in December 2025. Interest is payable semi-annually in arrears for all notes. Some of the notes were issued with fixed and floating rate coupons payable in US dollars and swapped back to Australian dollar floating rate coupons through cross currency swaps and interest rate swaps. b) Financing arrangements 2015 2014 $m $m

Total facilities Bank loans 1,400.0 1,388.2 Domestic MTN 625.0 825.0 Foreign MTN 1,088.4 914.3 3,113.4 3,127.5

Used at end of the reporting period Bank loans 920.2 975.2 Domestic MTN 625.0 825.0 Foreign MTN 1,088.4 914.3 2,633.6 2,714.5

Unused at end of the reporting period Bank loans 479.8 413.0 Domestic MTN — — Foreign MTN — — 479.8 413.0 c) Fair value Carrying amount Fair value

2015 2014 2015 2014 $m $m $m $m

Included in consolidated SoFP Non-traded financial liabilities Bank loans 920.2 975.2 920.2 975.2 Domestic MTN 625.0 825.0 664.2 868.8 Foreign MTN 1,088.4 914.3 1,148.5 970.5 Lease liabilities 0.3 3.1 0.3 3.1 2,633.9 2,717.6 2,733.2 2,817.6

None of the classes above is readily traded on organised markets in standardised form. The bank loans and lease liabilities are floating rate borrowings, therefore their fair value represents their respective carrying values. The fair value of domestic and foreign MTN has been calculated by discounting the expected future cash flows by the current market rates applicable to the relevant term of the MTN as disclosed in note 14. All borrowings are disclosed as level three in the fair value measurement hierarchy. For details on fair value hierarchy, refer to note 15.

56 MIRVAC GROUP ANNUAL REPORT 2015 12 Borrowings / continued i) Included in consolidated SoFP The fair value for borrowings less than 12 months to maturity is deemed to equal the carrying amounts. All other borrowings are discounted if the effect of discounting is material. The fair value of borrowings is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for liabilities with similar risk profiles. 13 Other financial assets and liabilities 13.1 Derivative financial instruments 2015 2014 $m $m

Current assets Interest rate swap contracts — fair value — 6.6 Cross currency swaps — fair value — 9.1 — 15.7

Non-current assets Interest rate swap contracts — fair value 16.5 6.9 Cross currency swaps — fair value 159.4 4.4 175.9 11.3

Current liabilities Interest rate swap contracts — fair value 12.4 13.0 12.4 13.0

Non-current liabilities Interest rate swap contracts — fair value 36.1 17.1 Cross currency derivatives — fair value 39.9 81.6 76.0 98.7

Mirvac’s derivatives are exclusively used for hedging purposes and not held for trading or speculative purposes. a) Instruments used by Mirvac Refer to note 14 for information on instruments used by Mirvac. b) Risk exposures Refer to note 14 for Mirvac’s exposure to foreign exchange, interest rate and credit risk on interest rate and cross currency swaps. c) Change in accounting policy The Group has applied the new standards on fair value measurement from 1 July 2014. The adoption of the standard has affected the measurement of the fair value of certain net derivative liabilities. The Group has recognised the adjustment as a fair value movement in profit or loss in the current period of $5.5m. d) Fair value measurement For information about the methods and assumptions used in determining the fair value of derivatives, refer to note 15. 13.2 Other financial assets at fair value through profit or loss 2015 2014 $m $m

Units in unlisted fund Balance 1 July 11.8 12.6 Loss on revaluation (0.5) (0.8) Balance 30 June 11.3 11.8

Changes in fair values of other financial assets at fair value through profit or loss are reflected in the consolidated SoCI as a gain or loss on fair value of derivative financial instruments. a) Unlisted securities Unlisted securities are traded in inactive markets. The fair value of investments that are not traded in an active market is determined by the unit price as advised by the trustee of the fund. Unlisted securities held in the Group are units in JF Infrastructure Yield Fund. James Fielding Trust, a wholly-owned Group entity, owns 12.9m units (22 per cent) of this entity. The fair value of the security is determined based on the value of the underlying assets held by the fund. The assets of the fund are subject to regular external valuations. These valuations are based on discounted net cash inflows from expected future income and/or comparable sales of similar assets. Appropriate discount rates determined by the external valuer are used to determine the present value of the net cash inflows based on a market interest rate adjusted for the risk premium specific to each asset. The fair value is determined using valuation techniques that are not supported by prices from an observable market; so, the fair value recognised in the consolidated financial statements could change significantly if the underlying assumptions made in estimating the fair values were significantly changed. b) Price risk exposure Refer to note 14 for Mirvac’s exposure to price risk on other financial assets at fair value through profit or loss.

MIRVAC GROUP ANNUAL REPORT 2015 57 Notes to the consolidated financial statements

13 Other financial assets and liabilities / continued 13.3 Other financial assets 2015 2014 $m $m

Current Heritage Maintenance Annuity — Treasury Building Hotel — 52.0 — 52.0

Non-current Convertible notes issued by Mirvac (Old Treasury) Trust 95.7 79.4 Loan notes issued by Blackstone 168.9 — 264.6 79.4

At 30 June 2015, the Group held $95.7m of convertible notes (2014: $79.4m) of convertible notes in the Mirvac (Old Treasury) Trust. The Group also has an investment accounted for using the equity method in the issuing joint venture. Convertible notes have been issued to fund the development costs of IPUC held by the joint venture. In the future, the convertible notes will be converted into equity held by the Group and the investment accounted for using the equity method will increase by the value of the convertible notes held. The Group holds $168.9m of loan notes (2014: $nil). $156.0m of notes were issued by Blackstone for partial non-receipt of funds for the sale of non-aligned assets during the year. The remaining $12.9m (2014: $nil) of notes relate to capitalised interest. a) Fair value measurement For information about the methods and assumptions used in determining the fair value of other financial assets, refer to note 15. 14 Financial risk management Mirvac’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. Mirvac’s overall risk management program seeks to minimise potential adverse effects on the financial performance of Mirvac. The Group uses various derivative financial instruments to manage certain risk exposures, specifically in relation to interest rate and foreign exchange risks on borrowings. Derivatives are exclusively used for hedging purposes and are not held for trading or speculative purposes. Financial risk management is carried out by Mirvac Group Treasury under policies approved by the Board. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, using derivative financial instruments and investing excess liquidity. Mirvac Group Treasury identifies, evaluates, reports and manages financial risks in close cooperation with the Group’s operating units in accordance with Board policy. The Group holds the following financial instruments: 2015 2014 Note $m $m

Financial assets Cash and cash equivalents 28 59.8 97.8 Receivables 10.1 129.8 159.2 Derivative financial assets 13.1 175.9 27.0 Other financial assets at fair value through profit or loss 13.2 11.3 11.8 Other financial assets 13.3 264.6 131.4 Total financial assets 641.4 427.2

Financial liabilities Payables 10.2 786.6 590.1 Borrowings 12 2,633.9 2,717.6 Derivative financial liabilities 13.1 88.4 111.7 Total financial liabilities 3,508.9 3,419.4

The carrying values of trade receivables (less impairment provision) and payables are assumed to approximate their fair values due to their short term nature. Derivative financial assets and liabilities are valued based upon valuation techniques (refer to note 15). a) Market risk Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will fluctuate because of changes in market prices. Market risk comprises currency risk, interest rate risk and price risk. i) Currency risk Foreign exchange risk refers to the change in value between foreign currencies and the Australian dollar. This change affects the assets and liabilities of Mirvac which are denominated in currencies other than Australian dollars. Mirvac foreign exchange risks arise mainly from: — borrowings denominated in currencies other than Australian dollars which are predominately US dollars; — investments in offshore operations which are located in the United States; — receipts and payments which are denominated in other currencies; and — foreign exchange risk on derivatives.

58 MIRVAC GROUP ANNUAL REPORT 2015 14 Financial risk management / continued Mirvac manages its foreign exchange risk for its assets and liabilities denominated in other currencies by borrowing in the same currency as that in which the offshore business operates to form a natural hedge against the movement in exchange rates. Mirvac manages its foreign currency note borrowings with cross currency swaps which swap the obligations to pay fixed or floating US dollar principal and interest payments to floating Australian dollar interest payments. Cross currency swaps in place cover 100 per cent of the US dollar denominated note principal and interest outstanding. These swaps have the same maturity profiles as the underlying note obligations. This removes exposure to interest rates in the US market while creating floating exposures in the domestic market that have been managed to meet Mirvac’s target interest rate profile. The foreign currency exchange rate has been fixed for US$375.0m swaps to A$/US$0.7456 and US$360.0m swaps to A$/US$0.9429. At 30 June 2015, the notional amounts and periods of expiry of the cross currency swap contracts for the Group were: 2015 2014 $m $m

Between one to two year(s) 368.9 — Between two to three years — 368.9 Between three to four years 134.1 — Between four to five years — 134.1 Greater than five years 381.9 381.9 884.9 884.9

All swaps require settlement on a quarterly basis. Translation gains or losses on the net investment in foreign operations are recorded through the foreign currency translation reserve. Sensitivity analysis Cross currency swaps are in place to manage the foreign exchange exposure on the US dollar debt. These swaps have the same notional principal and maturity profiles as those of the underlying note obligations. Based upon current exposures, the impact on the Group’s result of a 50 (2014: 25) basis point increase in US dollar interest rates would be a decrease in profit of $25.6m (2014: increase of $2.4m). The impact on Mirvac’s result of a 50 (2014: 25) basis point decrease in US dollar interest rates would be an increase in profit of $24.3m (2014: decrease of $1.4m). ii) Interest rate risk Mirvac’s interest rate risk arises from long term borrowings, cash and cash equivalents (refer to note 28(a)), receivables and derivatives. Borrowings Borrowings issued at variable rates expose Mirvac to cash flow interest rate risk. Borrowings issued at fixed rates expose Mirvac to fair value interest rate risk. The Group’s policy is to have a minimum of 40 per cent and a maximum of 80 per cent of borrowings subject to fixed or capped interest rates. This policy was complied with at the end of the year. Mirvac manages its cash flow interest rate risk by using interest rate derivatives, thereby maintaining fixed rate exposures within the policy range. Such interest rate derivatives have the economic effect of converting borrowings from floating rates to fixed or capped rates or vice versa. The following table sets out Mirvac’s net exposure to interest rate risk by maturity periods. Exposures arise predominately from liabilities bearing variable interest rates as the Group intends to hold fixed rate liabilities to maturity. Fixed interest maturing in

Floating 1 year Over 1 to 2 Over 2 to 3 Over 3 to 4 Over 4 to 5 Over interest rate or less year(s) years years years 5 years Total $m $m $m $m $m $m $m $m

2015 Unsecured bank loans 920.2 — — — — — — 920.2 Domestic MTN — — 225.0 200.0 200.0 — — 625.0 Foreign MTN 953.4 — 10.0 — — — 125.0 1,088.4 Interest rate swaps (1,100.0) 100.0 — 100.0 200.0 100.0 600.0 — Lease liabilities — 0.2 0.1 — — — — 0.3 773.6 100.2 235.1 300.0 400.0 100.0 725.0 2,633.9

2014 Unsecured bank loans 975.2 — — — — — — 975.2 Domestic MTN — 200.0 — 225.0 200.0 200.0 — 825.0 Foreign MTN 779.3 — — 10.0 — — 125.0 914.3 Interest rate swaps (650.0) (150.0) 100.0 100.0 200.0 200.0 200.0 — Lease liabilities — 2.9 0.1 0.1 — — — 3.1 1,104.5 52.9 100.1 335.1 400.0 400.0 325.0 2,717.6

MIRVAC GROUP ANNUAL REPORT 2015 59 Notes to the consolidated financial statements

14 Financial risk management / continued Derivative instruments used by Mirvac Mirvac enters into a variety of derivative instruments, although most commonly it uses interest rate swap agreements. Under the swap agreements, Mirvac agrees with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts. Aside from swap agreements, bought and/or sold option agreements are used which allow rates to float between certain ranges and bank cancellable agreements are used which allow the relevant bank to cancel the agreement if certain conditions arise, the benefit of which is lower fixed rates. These derivatives are recorded in the consolidated SoFP at fair value in accordance with AASB 139 Financial Instruments: Recognition and Measurement. The fair value movements are recorded through the consolidated SoCI (refer to notes 2 and 3). Derivatives currently in place cover approximately 61.4 per cent (2014: 57.1 per cent) of the loan principal outstanding. The fixed interest rates range between 2.50 and 6.40 per cent (2014: 2.50 and 6.40 per cent) per annum. At 30 June 2015, the notional principal amounts, interest rates and periods of expiry of the interest rate swap contracts held by the Group were as follows: Floating to fixed Fixed to floating

2015 2014 2015 2014

Interest Interest Interest Interest rates rates rates rates % pa $m % pa $m % pa $m % pa $m

1 year or less 4.75-5.50 100.0 — — — — 8.25 150.0 Over 1 to 2 year(s) — — 4.75-5.50 100.0 — — — — Over 2 to 3 years 2.50-6.40 300.0 4.70 100.0 5.50 200.0 — — Over 3 to 4 years 2.50-4.00 200.0 2.50-6.40 400.0 — — 5.5 200.0 Over 4 to 5 years 3.49 100.0 2.50-4.00 200.0 — — — — Over 5 years 2.81-4.36 600.0 3.49-4.00 200.0 — — — — 1,300.0 1,000.0 200.0 350.0

The contracts require settlement of net interest receivable or payable each reset date (generally 90 days). The settlement dates generally coincide with the dates on which interest is payable on the underlying debt. The contracts are settled on a net basis. Cash and cash equivalents Cash held exposes Mirvac to cash flow interest rate risk. Receivables The Group’s exposure to interest rate risk for current and non-current receivables is set out in the following table: Fixed interest maturing in

Floating Non- interest 1 year Over 1 to Over 2 to Over 3 to Over 4 to interest rate or less 2 year(s) 3 years 4 years 5 years bearing Total Note $m $m $m $m $m $m $m $m

2015 Trade receivables 10.1 — — — — — — 23.5 23.5 Related party receivables 10.1 — 9.3 15.1 — — — 19.9 44.3 Other receivables 10.1 18.9 2.5 2.7 0.2 — — 37.7 62.0 18.9 11.8 17.8 0.2 — — 81.1 129.8

2014 Trade receivables 10.1 — — — — — — 22.2 22.2 Related party receivables 10.1 — 5.8 11.2 15.1 — — 13.7 45.8 Loans to directors and employees 10.1 — — — — — — 2.3 2.3 Other receivables 10.1 16.2 3.1 4.9 — — — 64.7 88.9 16.2 8.9 16.1 15.1 — — 102.9 159.2

Sensitivity analysis Mirvac’s interest rate risk exposure arises from long term borrowings, cash held with financial institutions and receivables. Based upon a 50 (2014: 50) basis point increase or decrease in Australian interest rates, the impact on profit after tax has been calculated taking into account all underlying exposures and related derivatives. This sensitivity has been selected as this is considered reasonable given the current level of both short term and long term interest rates. The impact on the Group’s result of a 50 (2014: 50) basis point increase in interest rates assuming no interest is capitalised would be an increase in profit of $19.1m (2014: decrease of $2.3m). The impact on Mirvac’s result of a 50 (2014: 50) basis point decrease in interest rates would be decrease in profit of $20.5m (2014: increase of $1.5m). The interest rate sensitivities of the Group vary on an increase/decrease of 50 basis point movement in interest rates due to the interest rate optionality of a small number of derivatives.

60 MIRVAC GROUP ANNUAL REPORT 2015 14 Financial risk management / continued iii) Price risk The Group is exposed to equity price risk arising from an equity investment (refer to note 13.2). The equity investment is held for the purpose of selling in the near term. As this investment is not listed, the fund manager provides a unit price each six months. At the end of the year, if the unit price had been five per cent higher or lower, the effect on profit and on equity for the year would have been $0.6m (2014: $0.6m) higher or lower. This investment represents less than one per cent of Mirvac’s net assets and therefore represents minimal risk to the Group. The amount recognised in profit or loss in relation to the equity investment held by the Group is disclosed in note 13.2. Convertible notes do not convert at a fixed rate to equity, the conversion being based on NTA and as a result are not subject to material price risk. b) Credit risk Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and will cause a financial loss. Mirvac has exposures to credit risk on cash and cash equivalents, receivables and derivative financial assets; the maximum exposure to credit risk is based on the total value of the Group’s financial assets, net of any provision for impairment, as shown in note 10.1. To help manage this risk, the Group has a policy for establishing credit limits for the entities dealt with which is based on the size, previous trading experience of the entity or where available at reasonable cost, external credit ratings and/or reports. Based upon the information available, Mirvac may require collateral, such as bank guarantees or security deposits in relation to investment properties, leases or deposits taken on residential sales. Tenant receivables are reviewed throughout the year and if collection is deemed uncertain, a provision is made. Mirvac may also be subject to credit risk for transactions which are not included in the consolidated SoFP, such as when Mirvac provides a guarantee for another party. Details of the Group’s contingent liabilities are disclosed in note 23. The credit risk arising from derivatives transactions and cash held with financial institutions exposes the Group if the contracting entity is unable to complete its obligations under the contracts. Mirvac’s policy is to spread the amount of net credit exposure among major financial institutions which are rated the equivalent of A or above from the major rating agencies. Mirvac’s net exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread among approved counterparties. With regard to mezzanine loans, Mirvac monitors all loans advanced on a continuous basis. Formal procedures are in place, which include the regular review of each loan’s status, monitoring of compliance with loan terms and conditions, consideration of historical performance and future outlook of borrowers for realisation. These procedures include the process for the realisation of loans, review and determination of the appropriate carrying value of investments and regular dialogue with the borrowers to ensure material issues are identified as they arise. Refer to note 10.1 for the management of credit risk relating to receivables. c) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities, the ability to close out market positions and the ability to raise funds through the issue of new securities through various means including placements and/or Mirvac’s DRP. Mirvac prepares and updates regular forecasts of the Group’s liquidity requirements to ensure that committed credit lines are kept available in order to take advantage of growth opportunities. Surplus funds are generally only invested in highly liquid instruments. i) Financing arrangements At 30 June 2015, Mirvac has a strong liquidity position with available undrawn facilities and cash of $539.6m. During the year, the Group completed the extension and increase of its unsecured syndicated bank. ii) Maturities of financial liabilities Mirvac’s maturity of net and gross settled derivative and non-derivative financial instruments is provided in the following table. The amounts disclosed in the table are the contractual undiscounted cash flows: Maturing in

1 year Over 1 to Over 2 to Over 3 to Over 4 to Over or less 2 year(s) 3 years 4 years 5 years 5 years Total Note $m $m $m $m $m $m $m

2015 Non-interest bearing Payables 10.2 673.1 78.0 — — 35.5 — 786.6 Interest bearing Unsecured bank loans 18.8 20.3 195.4 217.5 306.4 252.6 1,011.0 Domestic MTN 40.5 256.5 217.0 11.5 11.5 205.8 742.8 Foreign MTN 28.2 403.6 22.2 156.2 21.9 602.0 1,234.1 Derivatives Net settled (interest rate swaps) 16.9 16.1 11.7 4.2 0.6 (12.9) 36.6 Fixed to floating swaps (6.8) (6.5) (3.0) — — — (16.3) Gross settled (cross currency swaps) — Outflow 18.7 384.4 13.4 147.3 13.0 440.5 1,017.3 — (Inflow) (46.9) (395.0) (29.3) (155.2) (21.5) (551.4) (1,199.3) 742.5 757.4 427.4 381.5 367.4 936.6 3,612.8

MIRVAC GROUP ANNUAL REPORT 2015 61 Notes to the consolidated financial statements

14 Financial risk management / continued Maturing in

1 year Over 1 to Over 2 to Over 3 to Over 4 to Over or less 2 year(s) 3 years 4 years 5 years 5 years Total Note $m $m $m $m $m $m $m

2014 Non-interest bearing Payables 10.2 505.1 42.1 7.4 — — 35.5 590.1 Interest bearing Unsecured bank loans 24.7 290.6 22.4 339.1 392.3 — 1,069.1 Domestic MTN 257.0 40.5 256.5 217.0 11.5 217.3 999.8 Foreign MTN 47.8 48.1 342.9 32.9 135.9 639.7 1,247.3 Derivatives Net settled (interest rate swaps) 13.7 8.6 7.1 3.7 (0.5) (0.8) 31.8 Fixed to floating swaps (13.9) (5.2) (4.5) (1.9) — — (25.5) Gross settled (cross currency swaps) — — — — — — — — Outflow 13.3 14.1 378.8 4.7 136.7 — 547.6 — (Inflow) (38.3) (38.6) (323.7) (24.0) (127.1) (469.3) (1,021.0) 809.4 400.2 686.9 571.5 548.8 422.4 3,439.2 d) Capital risk Mirvac’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so that it can provide returns to securityholders and meet its strategic objectives without increasing its overall risk profile. In assessing the optimal capital structure, the Group seeks to maintain an investment grade credit rating of BBB+ to reduce the cost of capital and diversify its sources of debt capital. At 30 June 2015, the gearing ratio (net debt including cross currency swaps to total tangible assets less cash) was 24.3 per cent (2014: 27.8 per cent). The Group’s target gearing ratio is 20 to 30 per cent. This may be exceeded in order to take advantage of appropriate opportunities, such as acquisitions as they arise. To manage the Group’s gearing ratio, a number of mechanisms are available. These may include adjusting the amount of dividends/distributions paid to securityholders, adjusting the number of securities on issue (via buy-backs), or the disposal of assets. Mirvac prepares quarterly consolidated SoFP, SoCI and cash flow updates for the current year and five year forecasts. These forecasts are used to monitor the Group’s capital structure and future capital requirements, taking into account future market conditions. AFSL ratios and Queensland Building licences ratios were complied with at 30 June 2015. Mirvac also complied with all its borrowing covenant ratios at 30 June 2015. The gearing ratios were as follows: 2015 2014 $m $m

Net interest bearing debt less cash 1 2,505.1 2,722.2 Total tangible assets less cash 10,304.7 9,784.9 Gearing ratio (%) 24.3 27.8

1) US dollar denominated borrowings translated at cross currency instrument rate and excluding leases. 15 Fair value measurement of financial instruments i) Fair value hierarchy The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: — quoted prices (unadjusted) in active markets for identical assets or liabilities (level one); — inputs other than quoted prices included within level one that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level two); and — inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level three).

62 MIRVAC GROUP ANNUAL REPORT 2015 15 Fair value measurement of financial instruments / continued The following table presents the Group’s assets and liabilities measured and recognised at fair value at 30 June 2015 and 30 June 2014 on a recurring basis: Level one Level two Level three Total Note $m $m $m $m

2015 Assets Other financial assets at fair value through profit or loss — unlisted securities 13.2 — — 11.3 11.3 Other financial assets 1 13.3 — — 264.6 264.6 Derivatives used for hedging 13.1 — 175.9 — 175.9 — 175.9 275.9 451.8

Liabilities Derivatives used for hedging 13.1 — 88.4 — 88.4 — 88.4 — 88.4

2014 Assets Other financial assets at fair value through profit or loss — unlisted securities 13.2 — — 11.8 11.8 Other financial assets 1 13.3 — — 131.4 131.4 Derivatives used for hedging 13.1 — 27.0 — 27.0 — 27.0 143.2 170.2

Liabilities Derivatives used for hedging 13.1 — 111.7 — 111.7 — 111.7 — 111.7

1) Relates to convertible notes associated with funding Mirvac (Old Treasury) Trust joint venture $95.7m (2014: $79.4m). Convertible notes have been issued to fund the development costs of IPUC held by the Group and they will be converted into equity held by the Group at the end of the development. Also included is the vendor financing arrangement with Blackstone $168.9m (2014: $nil) which relates to partial non-receipt of funds from sale relating to sale of non-aligned assets and Heritage Maintenance Annuity $nil (2014: $52.0m). There were no transfers between levels one, two and three for recurring fair value measurements during the year. The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. ii) Valuation techniques used to derive level one, level two and level three fair values Level one: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. Mirvac holds no level one financial instruments. Level two: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. Mirvac uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used to estimate fair value for long term debt for disclosure purposes. Other techniques, such as estimated DCF, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the end of the reporting period. These instruments are included in level two and comprise debt investments and derivative financial instruments, where the fair values have been determined based on present values and discount rates used were adjusted for counterparty or own credit or debit adjustments. Credit value adjustments: these are applied to mark-to-market assets based on the counterparty’s credit risk using the observable credit default swaps curve as a benchmark for credit risk. Debit value adjustments: these are applied to mark-to-market liabilities based on Mirvac’s credit risk using Mirvac’s credit default swaps curve as a benchmark for credit risk. Level three: If one or more of the valuation techniques for financial instruments is based on significant unobservable inputs, such instruments are included in level three. This is the case for unlisted securities and other financial assets.

MIRVAC GROUP ANNUAL REPORT 2015 63 Notes to the consolidated financial statements

15 Fair value measurement of financial instruments / continued iii) Fair value measurements using significant unobservable inputs (level three) The following table presents the changes in level three instruments for the year ended 30 June 2015 held by the Group: Unlisted Other financial securities assets Total $m $m $m

Balance 1 July 2013 12.6 187.1 199.7 Acquisitions — 41.5 41.5 Equity conversion — (97.2) (97.2) Loss recognised in other income 1 (0.8) — (0.8) Balance 30 June 2014 11.8 131.4 143.2

Acquisitions — 185.2 185.2 Disposal — (52.0) (52.0) Loss recognised in other income 1 (0.5) — (0.5) Balance 30 June 2015 11.3 264.6 275.9

1) Unrealised loss for the year included in gain/(loss) on fair value of derivative financial instruments that relate to assets held at the end of the year: 2015 (0.5) — (0.5) 2014 (0.8) — (0.8)

There were no transfers between the levels of the fair value hierarchy during the year. There were also no changes made to any of the valuation techniques applied as of 30 June 2015. The main level three inputs used by the Group in measuring the fair value of financial instruments are derived and evaluated as follows: — unlisted securities — fair values of the security unit prices: these are determined based on the valuation of the underlying assets held by the fund. These valuations are based on discounted net cash inflows from expected future income and/or comparable sales of similar assets; and — other financial assets — expected cash inflows: these are determined based on the development management agreement and vendor financing agreement with fixed repayment terms based on fixed interest rate and agreed project costs. iv) Sensitivity on changes in fair value of level three financial instruments For sensitivity analysis on level three unlisted securities, refer to note 14(a)(iii). v) Fair value of other financial instruments The carrying value of the other short term financial assets and financial liabilities being receivables and payables (set out in note 14) is considered to approximate their fair value.

GROUP STRUCTURE 16 Investments in JVA 2015 2014 Note $m $m

Consolidated SoFP Investments accounted for using the equity method Investments in associates 16(a)(i) — 0.5 Investments in joint ventures 16(a)(iii) 562.2 537.1 562.2 537.6

Consolidated SoCI Share of net profit of JVA accounted for using the equity method Investments in associates 16(d)(i) (0.5) 1.2 Investments in joint ventures 16(d)(ii) 68.5 45.7 68.0 46.9

64 MIRVAC GROUP ANNUAL REPORT 2015 16 Investments in JVA / continued a) Details of Mirvac’s JVA Investments in JVA are accounted for using the equity method of accounting. All JVA were established or incorporated in Australia. Information relating to JVA is as follows: i) Associates Carrying Interest value 2015 2014 2015 2014 Name of entity Principal activities % % $m $m Mindarie Keys Joint Venture 1 Residential development — 15 — — Mirvac Industrial Trust 2 Property investment — 14 — 0.5 — 0.5

1) This investment was wound up during the year. 2) This investment was sold on 3 December 2014. ii) Fair value of listed investments in associates 2015 2014 $m $m

Mirvac Industrial Trust — 8.4 iii) Joint ventures Carrying Interest value 2015 2014 2015 2014 Name of entity Principal activities % % $m $m Ascot Chase Nominee Stages 3-5 Pty Ltd Residential development 50 50 — — Australian Sustainable Forestry Investors 1&2 Forestry and environmental asset management 60 60 0.1 2.3 BAC Devco Pty Limited 1 Non-residential development 33 33 — — BL Developments Pty Limited Residential development 50 50 19.6 30.9 City West Property Investments (No.1) Trust Non-residential development 50 50 9.9 9.7 City West Property Investments (No.2) Trust Non-residential development 50 50 9.9 9.7 City West Property Investments (No.3) Trust Non-residential development 50 50 9.9 9.7 City West Property Investments (No.4) Trust Non-residential development 50 50 9.9 9.7 City West Property Investments (No.5) Trust Non-residential development 50 50 9.9 9.7 City West Property Investments (No.6) Trust Non-residential development 50 50 9.9 9.7 Domaine Investment Trust 2 Non-residential development — 50 — — Ephraim Island Joint Venture Residential development 50 50 — — Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited Non-residential development 50 50 27. 3 27.4 FreeSpirit Resorts Pty Limited Investment property 25 25 — — Googong Township Unit Trust Residential development 50 50 34.6 27.8 Harold Park Real Estate Unit Trust 3 Real estate agency 50 — 0.1 — Infocus Infrastructure Management Pty Limited Investment property 50 50 0.5 1.0 Leakes Road Rockbank Unit Trust Residential development 50 50 13.0 14.3 Mirvac 8 Chifley Trust Investment property 50 50 173.1 157. 3 Mirvac Green Square Pty Limited 4 Residential development — 50 — 1.5 Mirvac Lend Lease Village Consortium Residential development 50 50 0.4 0.9 Mirvac (Old Treasury) Trust Investment property 50 50 65.5 53.6 Mirvac Wholesale Residential Development Partnership Trust Residential development 20 20 11.0 21.8 MVIC Finance 2 Pty Limited Residential development 50 50 — — Tucker Box Hotel Group Hotel investment 50 50 157.6 138.5 Walsh Bay Partnership Residential development 50 50 — 1.6 562.2 537.1

1) This entity is in voluntary administration. 2) This entity was wound up on 29 June 2015. 3) This entity was established on 18 August 2014. 4) Previously registered as Green Square Consortium Pty Limited. The remaining 50 per cent interest was acquired by Mirvac on 11 August 2014 and this entity is now a controlled entity.

MIRVAC GROUP ANNUAL REPORT 2015 65 Notes to the consolidated financial statements

16 Investments in JVA / continued b) Share of JVA commitments Mirvac’s share of its JVA commitments which have been approved but not yet provided for at year ended 30 June 2015 are set out below: 2015 2014 $m $m

Capital commitments — — Total JVA commitments — — c) Summarised financial information for JVA The tables below provide summarised financial information for JVA of the Group. The information disclosed reflects the amounts presented in the financial statements of the relevant JVA and not the Mirvac’s share of those amounts. i) Associates Non- Current current financial financial liabilities liabilities Other Total Cash Other Total Total non- (excluding Other Total (excluding non- non- and cash current current current trade current current trade current current Net Summarised consolidated SoFP equivalents assets assets assets payables) liabilities liabilities payables) liabilities liabilities assets 2015 $m $m $m $m $m $m $m $m $m $m $m

Mindarie Keys Joint Venture 1 — — — — — — — — — — — Mirvac Industrial Trust 2 — — — — — — — — — — — — — — — — — — — — — —

2014 Mindarie Keys Joint Venture 0.4 — 0.4 — — 0.3 0.3 — — — 0.1 Mirvac Industrial Trust 3 16.5 1.1 17.6 219.2 2.9 12.7 15.6 142.3 — 142.3 78.9 16.9 1.1 18.0 219.2 2.9 13.0 15.9 142.3 — 142.3 79.0

1) This investment was wound up during the year. 2) The investment was sold on 3 December 2014. 3) SoFP based on the latest publicly available financial statements as at 31 December 2013. Other Opening Profit/(loss) compre- Issue/ Distributions Closing Reconciliation to net assets for the hensive (redemption) paid/ net Group’s Group’s Carrying carrying amounts 1 July year income of equity payable assets share in share in amount 2015 $m $m $m $m $m $m % $m $m

Mindarie Keys Joint Venture 1 — — — — — — — — — Mirvac Industrial Trust 2 — — — — — — — — — — — — — — — — —

2014

Mindarie Keys Joint Venture 5.9 3.5 — — (9.3) 0.1 15 — — Mirvac Industrial Trust 3 76.0 (0.3) 3.2 — — 78.9 14 11.0 0.5 81.9 3.2 3.2 — (9.3) 79.0 11.0 0.5

1) This investment was wound up during the year. 2) The investment was sold on 3 December 2014. 3) The investment was written down to $nil in 2009. The impairment on the loan to this investment was released during the year ended 30 June 2012. The Group did not recognise the full share of profit or loss in the investment since it had been fully impaired to $nil. Distributions Other Total received/ Profit/(loss) comprehensive comprehensive receivable Summarised consolidated SoCI Revenue for the year income income from associates 2015 $m $m $m $m $m

Mindarie Keys Joint Venture — — — — — Mirvac Industrial Trust — — — — — — — — — —

2014 Mindarie Keys Joint Venture 10.5 3.5 — 3.5 1.4 Mirvac Industrial Trust 17.3 (0.3) 3.2 2.9 0.3 27.8 3.2 3.2 6.4 1.7

66 MIRVAC GROUP ANNUAL REPORT 2015 16 Investments in JVA / continued ii) Joint ventures Non- Current current financial financial Total liabilities liabilities Other Total Other Total non- (excluding Other Total (excluding non- non- Cash and cash current current current trade current current trade current current Net Summarised consolidated SoFP equivalents assets assets assets payables) liabilities liabilities payables) liabilities liabilities assets 2015 $m $m $m $m $m $m $m $m $m $m $m

Ascot Chase Nominee Stages 3-5 Pty Ltd 2.8 6.2 9.0 11.0 11.0 1.5 12.5 12.3 0.4 12.7 (5.2) Australian Centre for Life Long Learning — — — — — — — — — — — Australian Sustainable Forestry Investors 1 & 2 0.2 — 0.2 — — — — — — — 0.2 BAC Devco Pty Limited — — — — — — — — — — — BL Developments Pty Limited 19.0 4.8 23.8 28.8 — 0.4 0.4 — — — 52.2 City West Property Investments (No. 1 to 6) Trusts 0.3 1.9 2.2 116.3 — — — — — — 118.5 Domaine Investment Trust — — — — — — — — — — — Ephraim Island Joint Venture 0.1 0.2 0.3 — — 0.1 0.1 — — — 0.2 Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 2.3 0.1 2.4 62.6 — 0.1 0.1 — — — 64.9 FreeSpirit Resorts Pty Limited 0.5 4.1 4.6 25.7 0.3 7.6 7.9 29.8 — 29.8 (7.4) Googong Township Unit Trust — 53.2 53.2 134.3 21.7 77.4 99.1 14.6 — 14.6 73.8 Harold Park Real Estate Unit Trust 0.5 (0.2) 0.3 — — 0.2 0.2 — — — 0.1 Infocus Infrastructure Management Pty Limited 1.6 0.1 1.7 — — 0.6 0.6 — — — 1.1 Leakes Road Rockbank Unit Trust 2.0 0.6 2.6 48.7 — 0.2 0.2 — 25.0 25.0 26.1 Mirvac 8 Chifley Trust 2.5 0.5 3.0 379.2 — 3.0 3.0 — — — 379.2 Mirvac Green Square Pty Limited — — — — — — — — — — — Mirvac Lend Lease Village Consortium 4.0 — 4.0 — — 3.5 3.5 — — — 0.5 Mirvac (Old Treasury) Trust 66.3 0.1 66.4 264.4 — (1.6) (1.6) 191.4 — 191.4 141.0 Mirvac Wholesale Residential Development Partnership Trust 36.5 103.7 140.2 51.1 23.0 60.3 83.3 36.0 — 36.0 72.0 MVIC Finance 2 Pty Limited 0.1 — 0.1 — — — — — — — 0.1 Tucker Box Hotel Group 1.2 6.7 7.9 472.5 1.7 7.9 9.6 153.7 0.9 154.6 316.2 Walsh Bay Partnership — — — — — — — — — — — 139.9 182.0 321.9 1,594.6 57.7 161.2 218.9 437.8 26.3 464.1 1,233.5

2014

Ascot Chase Nominee Stages 3-5 Pty Ltd 26.7 8.3 35.0 15.3 11.7 4.5 16.2 36.9 (0.1) 36.8 (2.7) Australian Centre for Life Long Learning 0.7 89.7 90.4 0.1 — 40.1 40.1 35.2 — 35.2 15.2 Australian Sustainable Forestry Investors 1 & 2 5.5 — 5.5 — — — — — — — 5.5 BAC Devco Pty Limited — — — — — — — — — — — BL Developments Pty Limited 35.1 5.1 40.2 35.4 — 0.7 0.7 — (0.5) (0.5) 75.4 City West Property Investments (No. 1 to 6) Trusts 0.3 4.4 4.7 112.4 — 0.1 0.1 — — — 117.0 Domaine Investment Trust — — — — — — — — — — — Ephraim Island Joint Venture 0.4 — 0.4 — — 0.2 0.2 — — — 0.2 Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 2.7 — 2.7 62.3 — 0.1 0.1 — — — 64.9 FreeSpirit Resorts Pty Limited 0.2 4.1 4.3 1.0 0.3 7.2 7.5 3.5 — 3.5 (5.7) Googong Township Unit Trust — 32.0 32.0 103.4 14.9 11.7 26.6 6.7 39.0 45.7 63.1 Green Square Consortium Pty Limited 1.5 1.5 3.0 16.7 4.8 11.4 16.2 — 0.4 0.4 3.1 HPAL Freehold Pty Limited — — — — — — — — — — — Infocus Infrastructure Management Pty Limited 2.1 0.1 2.2 — — 0.2 0.2 — — — 2.0 Leakes Road Rockbank Unit Trust 1.0 — 1.0 32.0 — 1.1 1.1 — 3.3 3.3 28.6 Mirvac 8 Chifley Trust 0.2 0.4 0.6 347.6 — 0.5 0.5 — — — 347.7 Mirvac Lend Lease Village Consortium 4.3 — 4.3 — — 2.1 2.1 — — — 2.2 Mirvac (Old Treasury) Trust 151.5 0.2 151.7 124.2 — (0.2) (0.2) 158.9 — 158.9 117.2 Mirvac Wholesale Residential Development Partnership Trust 35.0 69.0 104.0 108.1 — 9.7 9.7 76.7 — 76.7 125.7 MVIC Finance 2 Pty Limited 0.1 — 0.1 — — — — — — — 0.1 Tucker Box Hotel Group 4.8 7.2 12.0 423.6 2.8 7.5 10.3 146.2 1.1 147.3 278.0 Walsh Bay Partnership — 0.6 0.6 — — 2.6 2.6 — — — (2.0) 272.1 222.6 494.7 1,382.1 34.5 99.5 134.0 464.1 43.2 507.3 1,235.5

MIRVAC GROUP ANNUAL REPORT 2015 67 Notes to the consolidated financial statements

16 Investments in JVA / continued Other Opening (Loss)/ compre- Issue/ Distributions net assets profit for hensive (return) paid/ Closing Group’s Group’s Carrying Reconciliation to carrying amounts 1 July the year income of equity payable net assets share share in amount 2015 $m $m $m $m $m $m % $m $m

Ascot Chase Nominee Stages 3-5 Pty Ltd 1 (2.7) (2.5) — — — (5.2) 50 (2.6) — Australian Sustainable Forestry Investors 1 & 2 5.5 — — — (5.3) 0.2 60 0.1 0.1 BAC Devco Pty Limited — — — — — — 33 — — BL Developments Pty Limited 2 75.4 0.2 — — (23.4) 52.2 50 26.1 19.6 City West Property Investments (No. 1 to 6) Trusts 117.0 1.5 — — — 118.5 50 59.3 59.4 Domaine Investment Trust — — — — — — — — — Ephraim Island Joint Venture 0.2 — — — — 0.2 50 0.1 — Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 2 64.9 — — — — 64.9 50 32.5 27.3 FreeSpirit Resorts Pty Limited (5.7) (1.7) — — — (7.4) 25 (1.9) — Googong Township Unit Trust 3 63.1 8.3 2.4 — — 73.8 50 36.9 34.6 Harold Park Real Estate Unit Trust — (0.4) — 0.5 — 0.1 50 0.1 0.1 Infocus Infrastructure Management Pty Limited 2.0 1.1 — — (2.0) 1.1 50 0.6 0.5 Leakes Road Rockbank Unit Trust 28.6 (2.5) — — — 26.1 50 13.1 13.0 Mirvac 8 Chifley Trust 2 347.7 53.7 — — (22.2) 379.2 50 189.6 173.1 Mirvac Green Square Pty Limited 3.1 — — (3.1) — — — — — Mirvac Lend Lease Village Consortium 2.2 — — — (1.7) 0.5 50 0.3 0.4 Mirvac (Old Treasury) Trust 2 117.2 4.2 — 23.6 (4.0) 141.0 50 70.5 65.5 Mirvac Wholesale Residential Development Partnership Trust 2 125.7 3.1 — (56.8) — 72.0 20 14.4 11.0 MVIC Finance 2 0.1 — — — — 0.1 50 0.1 — Tucker Box Hotel Group 278.0 64.8 — — (26.6) 316.2 50 158.1 157.6 Walsh Bay Partnership (2.0) (4.3) — 6.3 — — 50 — — 1,235.5 125.5 (21.2) (21.1) (85.2) 1,233.5 597.3 562.2

2014

Ascot Chase Nominee Stages 3-5 Pty Ltd 1 (0.8) (1.9) — — — (2.7) 50 (1.4) — Australian Centre for Life Long Learning 4 14.9 0.3 — — — 15.2 — — — Australian Sustainable Forestry Investors 1 & 2 5 31.7 (13.7) — (12.5) — 5.5 60 3.3 2.3 BAC Devco Pty Limited — — — — — — 33 — — BL Developments Pty Limited 2 74.5 0.9 — — — 75.4 50 37.7 30.9 City West Property Investments (No. 1 to 6) Trusts 115.2 1.8 — — — 117.0 50 58.5 58.2 Domaine Investment Trust (5.2) 5.2 — — — — 50 — — Ephraim Island Joint Venture 7.1 (2.0) — — (4.9) 0.2 50 0.1 — Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 2 64.8 0.1 — — — 64.9 50 32.5 27.4 FreeSpirit Resorts Pty Limited (4.6) (1.1) — — — (5.7) 25 (1.4) — Googong Township Unit Trust 6 52.0 11.1 — — — 63.1 50 31.6 27.8 Green Square Consortium Pty Limited — 0.1 — 3.0 — 3.1 50 1.6 1.5 HPAL Freehold Pty Limited 7 15.0 (14.7) — (0.3) — — — — — Infocus Infrastructure Management Pty Limited 1.2 1.2 — — (0.4) 2.0 50 1.0 1.0 Leakes Road Rockbank Unit Trust 28.3 0.3 — — — 28.6 50 14.3 14.3 Mirvac 8 Chifley Trust 2 84.2 12.9 — 250.6 — 347.7 50 173.9 157.3 Mirvac Lend Lease Village Consortium 2.3 (0.1) — — — 2.2 50 1.1 0.9 Mirvac (Old Treasury) Trust 2 70.3 3.5 — 45.7 (2.3) 117.2 50 58.6 53.6 Mirvac Wholesale Residential Development Partnership Trust 2 120.0 25.0 — (19.3) — 125.7 20 25.1 21.8 MVIC Finance 2 Pty Limited 0.1 — — — — 0.1 50 0.1 — Tucker Box Hotel Group 244.1 58.7 — — (24.8) 278.0 50 139.0 138.5 Walsh Bay Partnership (0.1) — — (1.9) — (2.0) 50 (1.0) 1.6 915.0 87.6 — 265.3 (32.4) 1,235.5 574.6 537.1

1) The investment is in an asset deficiency position and the Group has taken the amount to its liability on the consolidated SoFP. 2) The difference between the carrying amount and the Group’s share in the net assets of its investment is a result of elimination due to the Group’s transactions with its investment. 3) The difference between the carrying amount and the Group’s share in the net assets of its investment is due to the fair value adjustment of the loan not taken up by the Group. 4) The Group disposed of this investment during the year. 5) The investment has disposed of its assets and made a part repayment of capital to its investors. The remaining of the capital will be repaid in FY15. The Group is still holding part of the provision previously made against this investment. As a result, the carrying amount is less than Group’s entitlement to the net asset of the investment. 6) The difference between the carrying amount and the Group’s share in the net assets of its investment is due to a different methodology on allocation of cost of goods sold upon settlements of project lots in the joint venture. 7) This investment was deregistered on 5 September 2013.

68 MIRVAC GROUP ANNUAL REPORT 2015 16 Investments in JVA / continued Distributions Depreciation (Loss)/ Other Total received/ and Income profit compre- compre- receivable Interest amortis- Interest tax for the hensive hensive from joint Summarised consolidated SoCI Revenue income ation expense expense year income income ventures 2015 $m $m $m $m $m $m $m $m $m

Ascot Chase Nominee Stages 3-5 Pty Ltd 16.1 2.0 — 5.7 (1.1) (2.5) — (2.5) — Australian Centre for Life Long Learning — — — — — — (23.6) (23.6) — Australian Sustainabe Forestry Investors 1 & 2 — — — — — — — — 3.2 BAC Devco Pty Limited — — — — — — — — — BL Developments Pty Limited 9.4 0.9 — 0.2 — 0.7 — 0.7 11.7 City West Property Investments (No. 1 to 6) Trusts 1.9 — — — — 1.7 — 1.7 — Domaine Investment Trust — — — — — — — — — Ephraim Island Joint Venture — — — — — — — — — Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 0.1 0.1 — — — — — — — FreeSpirit Resorts Pty Limited 6.3 — — — — (1.8) — (1.8) — Googong Township Unit Trust 50.4 0.2 0.3 2.2 (0.1) 8.4 2.4 10.8 — Harold Park Real Estate Unit Trust 0.3 — — — — (0.4) — (0.4) — Infocus Infrastructure Management Pty Limited 1.7 — — — 0.5 1.1 — 1.1 1.0 Leakes Road Rockbank Unit Trust — — — — — (2.6) — (2.6) — Mirvac 8 Chifley Trust 57.8 — — — — 53.7 — 53.7 11.1 Mirvac Green Square Pty Limited — — — — — — — — — Mirvac Lend Lease Village Consortium 0.1 0.1 — — — — — — — Mirvac (Old Treasury) Trust 4.2 3.4 — — — 4.2 — 4.2 1.9 Mirvac Wholesale Residential Development Partnership Trust 73.9 0.4 — 6.2 — 1.8 — 1.8 — Tucker Box Hotel Group 74.1 0.1 — 8.0 0.1 64.0 — 64.0 13.3 Walsh Bay Partnership — — — — — (0.7) — (0.7) — 296.3 7.2 0.3 22.3 (0.6) 127.6 (21.2) 106.4 42.2

2014

Ascot Chase Nominee Stages 3-5 Pty Ltd 25.5 3.5 — 7.1 (0.8) (1.9) — (1.9) — Australian Centre for Life Long Learning 0.3 — — — — 0.2 — 0.2 — Australian Sustainable Forestry Investors 1 & 2 2.1 0.1 — 1.2 — 0.2 — 0.2 — BAC Devco Pty Limited — — — — — — — — — BL Developments Pty Limited 13.5 0.6 — 0.2 — (0.5) — (0.5) — City West Property Investments (No. 1 to 6) Trusts 1.6 — — — — 1.4 — 1.4 — Domaine Investment Trust — — — — — — — — — Ephraim Island Joint Venture 8.4 — — (0.6) — (2.0) — (2.0) 2.4 Fast Track Bromelton Pty Limited and Nakheel SPV Pty Limited 0.1 0.1 — — — 0.1 — 0.1 — FreeSpirit Resorts Pty Limited 10.2 — — — — (0.7) — (0.7) — Googong Township Unit Trust 72.8 0.2 0.1 0.6 — 11.1 — 11.1 — Green Square Consortium Pty Limited (1.4) 0.1 — — — — — — — HPAL Freehold Pty Limited — — — — — — — — — Infocus Infrastructure Management Pty Limited 1.7 — — — 0.5 1.2 — 1.2 0.2 Leakes Road Rockbank Unit Trust — — — 0.3 — 0.4 — 0.4 — Mirvac 8 Chifley Trust 32.7 — — 16.7 — 12.8 — 12.8 — Mirvac Lend Lease Village Consortium 0.1 — — — — 0.1 — 0.1 — Mirvac (Old Treasury) Trust 3.5 3.0 — — — 3.5 — 3.5 1.2 Mirvac Wholesale Residential Development Partnership Trust 251.4 0.5 — 21.0 — 25.0 — 25.0 — MVIC Finance 2 Pty Limited — — — — — — — — — Tucker Box Hotel Group 68.5 0.1 — 10.0 0.1 58.6 — 58.6 12.4 Walsh Bay Partnership — — — — — — — — — 491.0 8.2 0.1 56.5 (0.2) 109.5 — 109.5 16.2

MIRVAC GROUP ANNUAL REPORT 2015 69 Notes to the consolidated financial statements

16 Investments in JVA / continued d) Reconciliation of the carrying amount of investments in JVA i) Associates 2015 2014 $m $m

Movements in carrying amount Balance 1 July 0.5 0.5 Distributions received/receivable — (1.7) Share of profit from ordinary operating activities (0.5) 1.2 Other — 0.5 Balance 30 June — 0.5 ii) Joint ventures 2015 2014 $m $m

Movements in carrying amount Balance 1 July 537.1 379.4 Equity acquired 15.2 151.3 Repayment of capital (11.8) (11.4) Distributions received/receivable (42.2) (16.2) Deferred revenue eliminated — (12.3) Share of profit from ordinary operating activities 68.5 45.7 Transfers to investment in controlled entities (1.5) — Other (3.1) 0.6 Balance 30 June 562.2 537.1 e) Investment in associates accounted for at fair value Interest 2015 2014 2015 2014 Name of entity Principal activities % % $m $m

JF Infrastructure Yield Fund Infrastructure 22 22 11.3 11.8

For information about the methods and assumptions used in determining the fair value of other financial assets at fair value through profit or loss, refer to note 15. f) Impairment of investments In the year ended 30 June 2015, there was no impairment provision taken against the carrying value of the investments in JVA (2014: $nil). Investments in JVA are reviewed at the end of each reporting period for any impairment and written off to the extent that the future benefits are no longer probable and do not support the carrying value of the investment. g) Investments in unconsolidated structured entities Mirvac is not contractually obliged to provide financial support to its unconsolidated structured entities. Mirvac invests in a number of funds and trusts. These investments are open-end and closed-end investment funds and trusts which invest in infrastructure and industrial real estate for the purpose of capital appreciation and/or to earn investment income. The investees finance their operations through borrowings and through equity issues. Material unconsolidated structured entities include the following: — JF Infrastructure Yield Fund; and — ASFI. As Mirvac does not provide financial support, the exposure of Mirvac is equal to the carrying value being $11.4m (2014: $14.6m).

70 MIRVAC GROUP ANNUAL REPORT 2015 17 Controlled entities and deed of cross guarantee The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in accordance with the accounting policy described in note 30(a): Country of Equity holding establishment/ Class of 2015 2014 Name of entity incorporation units/shares % % a) Interests in controlled entities of Mirvac 107 Mount Street Head Trust Australia Units 100 100 107 Mount Street Sub Trust Australia Units 100 100 197 Salmon Street Pty Limited 1 Australia Ordinary 100 100 A.C.N. 087 773 859 Pty Limited 1 Australia Ordinary 100 100 A.C.N. 110 698 603 Pty Limited 1 Australia Ordinary 100 100 A.C.N. 150 521 583 Pty Limited 1 Australia Ordinary 100 100 A.C.N. 165 515 515 Pty Limited 1 Australia Ordinary 100 100 Banksia Unit Trust Australia Units 100 100 CN Collins Pty Limited 1 Australia Ordinary 100 100 Domaine Investments Management Pty Limited Australia Ordinary 50 50 Fast Track Bromelton Pty Limited 1 Australia Ordinary 100 100 Ford Mirvac Unit Trust Australia Units 100 100 Fyfe Road Pty Limited 1 Australia Ordinary 100 100 Gainsborough Greens Pty Limited 1 Australia Ordinary 100 100 Hexham Project Pty Limited 1 Australia Ordinary 100 100 HIR Boardwalk Tavern Pty Limited 1 Australia Ordinary 100 100 HIR Golf Club Pty Limited 1 Australia Ordinary 100 100 HIR Golf Course Pty Limited 1 Australia Ordinary 100 100 HIR Property Management Holdings Pty Limited 1 Australia Ordinary 100 100 HIR Tavern Freehold Pty Limited 1 Australia Ordinary 100 100 Hoxton Park Airport Limited 1 Australia Ordinary 100 100 HPAL Holdings Pty Limited 1 Australia Ordinary 100 100 Industrial Commercial Property Solutions (Constructions) Pty Limited 1 Australia Ordinary 100 100 Industrial Commercial Property Solutions (Finance) Pty Limited 1 Australia Ordinary 100 100 Industrial Commercial Property Solutions (Holdings) Pty Limited 1 Australia Ordinary 100 100 Industrial Commercial Property Solutions (Queensland) Pty Limited 1 Australia Ordinary 100 100 Industrial Commercial Property Solutions Pty Limited 1 Australia Ordinary 100 100 JF ASIF Pty Limited 1 Australia Ordinary 100 100 Magenta Shores Finance Pty Limited 1 Australia Ordinary 100 100 Magenta Shores Unit Trust Australia Units 100 100 Magenta Unit Trust Australia Units 100 100 MFM US Real Estate Inc United States Ordinary 100 100 MGR US Real Estate Inc United States Ordinary 100 100 Mirvac (Beacon Cove) Pty Limited 1 Australia Ordinary 100 100 Mirvac (Docklands) Pty Limited 1 Australia Ordinary 100 100 Mirvac (Old Treasury Development Manager) Pty Limited 1 Australia Ordinary 100 100 Mirvac (Old Treasury) Pty Limited Australia Ordinary 50 50 Mirvac (Old Treasury Hotel) Pty Limited 1 Australia Ordinary 100 100 Mirvac (WA) Pty Limited 1 Australia Ordinary 100 100 Mirvac (Walsh Bay) Pty Limited 1 Australia Ordinary 100 100 Mirvac 8 Chifley Pty Limited Australia Ordinary 50 50 Mirvac Advisory Pty Limited 1 Australia Ordinary 100 100 Mirvac Aero Company Pty Limited 1 Australia Ordinary 100 100 Mirvac AOP SPV Pty Limited 1 Australia Ordinary 100 100 Mirvac Blue Trust Australia Units 100 100 Mirvac Birkenhead Point Marina Pty Limited 1,2 Australia Ordinary 100 — Mirvac Capital Investments Pty Limited 1 Australia Ordinary 100 100 Mirvac Capital Office Pty Limited 1 Australia Ordinary 100 100 Mirvac Capital Partners Limited 3 Australia Ordinary 100 100 Mirvac Capital Partners Investment Management Pty Limited 1 Australia Ordinary 100 100 Mirvac Capital Pty Limited 1 Australia Ordinary 100 100 Mirvac Chifley Holdings Pty Limited Australia Ordinary 100 100 Mirvac Commercial Funding Pty Limited 1 Australia Ordinary 100 100 Mirvac Commercial Sub SPV Pty Limited 1 Australia Ordinary 100 100 Mirvac Constructions (Homes) Pty Limited 1 Australia Ordinary 100 100 Mirvac Constructions (QLD) Pty Limited 1 Australia Ordinary 100 100

MIRVAC GROUP ANNUAL REPORT 2015 71 Notes to the consolidated financial statements

17 Controlled entities and deed of cross guarantee / continued Country of Equity holding establishment/ Class of 2015 2014 Name of entity incorporation units/shares % %

Mirvac Constructions (SA) Pty Limited 1 Australia Ordinary 100 100 Mirvac Constructions (VIC) Pty Limited 1 Australia Ordinary 100 100 Mirvac Constructions (WA) Pty Limited 1 Australia Ordinary 100 100 Mirvac Constructions Pty Limited 1 Australia Ordinary 100 100 Mirvac Design Pty Limited 1 Australia Ordinary 100 100 Mirvac Developments Pty Limited 1 Australia Ordinary 100 100 Mirvac Doncaster Pty Limited 1 Australia Ordinary 100 100 Mirvac Elderslie Pty Limited 1 Australia Ordinary 100 100 Mirvac ESAT Pty Limited 1 Australia Ordinary 100 100 Mirvac Finance Limited 1 Australia Ordinary 100 100 Mirvac Funds Limited 3 Australia Ordinary 100 100 Mirvac Funds Management Limited 3 Australia Ordinary 100 100 Mirvac George Street Holdings Pty Limited 1 Australia Ordinary 100 100 Mirvac George Street Pty Limited 1 Australia Ordinary 100 100 Mirvac Green Square Pty Limited 4 Australia Ordinary 100 50 Mirvac Green Trust Australia Units 100 100 Mirvac Group Finance Limited 1 Australia Ordinary 100 100 Mirvac Group Funding Limited 1 Australia Ordinary 100 100 Mirvac Harbourtown Pty Limited 1 Australia Ordinary 100 100 Mirvac Harold Park Pty Limited 1 Australia Ordinary 100 100 Mirvac Harold Park Trust Australia Units 100 100 Mirvac Holdings (WA) Pty Limited 1 Australia Ordinary 100 100 Mirvac Holdings Limited 1 Australia Ordinary 100 100 Mirvac Home Builders (VIC) Pty Limited 1 Australia Ordinary 100 100 Mirvac Homes (NSW) Pty Limited 1 Australia Ordinary 100 100 Mirvac Homes (QLD) Pty Limited 1 Australia Ordinary 100 100 Mirvac Homes (SA) Pty Limited 1 Australia Ordinary 100 100 Mirvac Homes (VIC) Pty Limited 1 Australia Ordinary 100 100 Mirvac Homes (WA) Pty Limited 1 Australia Ordinary 100 100 Mirvac Hotel Services Pty Limited 1 Australia Ordinary 100 100 Mirvac ID (Bromelton) Pty Limited 1 Australia Ordinary 100 100 Mirvac ID (Bromelton) Sponsor Pty Limited 1 Australia Ordinary 100 100 Mirvac Industrial Developments Pty Limited 1 Australia Ordinary 100 100 Mirvac International (Middle East) No. 2 Pty Limited 1 Australia Ordinary 100 100 Mirvac International (Middle East) No. 3 Pty Limited 1 Australia Ordinary 100 100 Mirvac International Investments Limited 1 Australia Ordinary 100 100 Mirvac International No. 3 Pty Limited 1 Australia Ordinary 100 100 Mirvac JV’s Pty Limited 1 Australia Ordinary 100 100 Mirvac Kent Street Holdings Pty Limited 1 Australia Ordinary 100 100 Mirvac Mandurah Pty Limited 1 Australia Ordinary 100 100 Mirvac National Developments Pty Limited 1 Australia Ordinary 100 100 Mirvac Newcastle Pty Limited 1 Australia Ordinary 100 100 Mirvac Old Treasury Holdings Pty Limited 1 Australia Ordinary 100 100 Mirvac Pacific Pty Limited 1 Australia Ordinary 100 100 Mirvac Parking Pty Limited 1 Australia Ordinary 100 100 Mirvac Parklea Pty Limited 1 Australia Ordinary 100 100 Mirvac Precinct 2 Pty Limited 1 Australia Ordinary 100 100 Mirvac Procurement Pty Limited 1 Australia Ordinary 100 100 Mirvac Projects Dalley Street Pty Limited 1 Australia Ordinary 100 100 Mirvac Projects Dalley Street Trust Australia Units 100 100 Mirvac Projects George Street Pty Limited 1 Australia Ordinary 100 100 Mirvac Projects George Street Trust Australia Units 100 100 Mirvac Projects No. 2 Pty Limited 1 Australia Ordinary 100 100 Mirvac Projects Norwest Trust 2 Australia Units 100 — Mirvac Projects Norwest No. 2 Trust 2 Australia Units 100 — Mirvac Projects Pty Limited 1 Australia Ordinary 100 100 Mirvac Projects (Retail and Commercial) Pty Ltd 1,5 Australia Ordinary 100 100 Mirvac Projects Trust 2 Australia Units 100 — Mirvac Properties Pty Limited 1 Australia Ordinary 100 100

72 MIRVAC GROUP ANNUAL REPORT 2015 17 Controlled entities and deed of cross guarantee / continued Country of Equity holding establishment/ Class of 2015 2014 Name of entity incorporation units/shares % %

Mirvac Property Advisory Services Pty Limited 1 Australia Ordinary 100 100 Mirvac Property Services Pty Limited 1 Australia Ordinary 100 100 Mirvac Queensland Pty Limited 1 Australia Ordinary 100 100 Mirvac Real Estate Debt Funds Pty Limited 1 Australia Ordinary 100 100 Mirvac Real Estate Pty Limited 1 Australia Ordinary 100 100 Mirvac REIT Management Limited 3 Australia Ordinary 100 100 Mirvac Retail Head SPV Pty Limited 1 Australia Ordinary 100 100 Mirvac Retail Sub SPV Pty Limited 1 Australia Ordinary 100 100 Mirvac Rockbank Pty Limited 1 Australia Ordinary 100 100 Mirvac Services Pty Limited 1 Australia Ordinary 100 100 Mirvac St Leonards Pty Limited 2 Australia Ordinary 100 — Mirvac St Leonards Trust 2 Australia Units 100 — Mirvac South Australia Pty Limited 1 Australia Ordinary 100 100 Mirvac Spare Pty Limited 1 Australia Ordinary 100 100 Mirvac Spring Farm Limited 1 Australia Ordinary 100 100 Mirvac SPV 1 Pty Limited 1 Australia Ordinary 100 100 Mirvac Trademarks Pty Limited 1 Australia Ordinary 100 100 Mirvac Treasury Limited 1 Australia Ordinary 100 100 Mirvac Treasury No. 3 Limited 1 Australia Ordinary 100 100 Mirvac Victoria Pty Limited 1 Australia Ordinary 100 100 Mirvac Waterloo Pty Limited 1 Australia Ordinary 100 100 Mirvac Wholesale Funds Management Limited 1 Australia Ordinary 100 100 Mirvac Wholesale Industrial Developments Limited 1 Australia Ordinary 100 100 Mirvac Woolloomooloo Pty Limited 1 Australia Ordinary 100 100 MRV Hillsdale Pty Limited 1 Australia Ordinary 100 100 MWID (Brendale) Pty Limited 1 Australia Ordinary 100 100 MWID (Brendale) Unit Trust Australia Units 100 100 MWID (Mackay) Pty Limited 1 Australia Ordinary 100 100 Newington Homes Pty Limited 1 Australia Ordinary 100 100 Oakstand No. 15 Hercules Street Pty Limited 1 Australia Ordinary 100 100 Pigface Unit Trust Australia Units 100 100 Planned Retirement Living Pty Limited 1 Australia Ordinary 100 100 Rovno Pty Limited Australia Ordinary 100 100 Spring Farm Finance Pty Limited 1 Australia Ordinary 100 100 Springfield Development Company Pty Limited 1 Australia Ordinary 100 100 SPV Magenta Pty Limited 1 Australia Ordinary 100 100 Suntrack Holdings Pty Limited Australia Ordinary 100 100 Suntrack Property Trust Australia Units 100 100 Taree Shopping Centre Pty Limited Australia Ordinary 100 100 TMT Finance Pty Limited1 Australia Ordinary 100 100 Tucker Box Management Pty Limited 1 Australia Ordinary 100 100 b) Interests in controlled entities of MPT 10-20 Bond Street Trust Australia Units 100 100 1900-2000 Pratt Inc. United States Ordinary 100 100 197 Salmon Street Trust Australia Units 100 100 275 Kent Street Holding Trust Australia Units 100 100 367 Collins Street Trust Australia Units 100 100 367 Collins Street No. 2 Trust Australia Units 100 100 380 St Kilda Road Trust 6 Australia Units 100 100 477 Collins Street No. 1 Trust Australia Units 100 100 477 Collins Street No. 2 Trust Australia Units 100 100 Australian Office Partnership Trust Australia Units 100 100 Cannon Hill Office Trust 7 Australia Units — 100 Chifley Holding Trust Australia Units 100 100 George Street Holding Trust Australia Units 100 100 James Fielding Trust Australia Units 100 100 JF Infrastruture — Sustainable Equity Fund Australia Units 100 100 JFIF Victorian Trust Australia Units 100 100 JFM Hotel Trust Australia Units 100 100

MIRVAC GROUP ANNUAL REPORT 2015 73 Notes to the consolidated financial statements

17 Controlled entities and deed of cross guarantee / continued Country of Equity holding establishment/ Class of 2015 2014 Name of entity incorporation units/shares % %

Meridian Investment Trust No. 1 Australia Units 100 100 Meridian Investment Trust No. 2 Australia Units 100 100 Meridian Investment Trust No. 3 Australia Units 100 100 Meridian Investment Trust No. 4 Australia Units 100 100 Meridian Investment Trust No. 5 Australia Units 100 100 Meridian Investment Trust No. 6 Australia Units 100 100 Mirvac 210 George Street Trust 8 Australia Units — 100 Mirvac 220 George Street Trust 8 Australia Units — 100 Mirvac 90 Collins Street Trust Australia Units 100 100 Mirvac Allendale Square Trust Australia Units 100 100 Mirvac Bourke Street No.1 Sub-Trust Australia Units 100 100 Mirvac Bourke Street No.2 Sub-Trust Australia Units 100 100 Mirvac Broadway Sub-Trust Australia Units 100 100 Mirvac Capital Partners 1 Trust Australia Units 100 100 Mirvac Collins Street Trust No.1 Sub-Trust Australia Units 100 100 Mirvac Collins Street Trust No.2 Sub-Trust Australia Units 100 100 Mirvac Commercial Trust Australia Units 100 100 Mirvac Commercial No.1 Sub Trust 9 Australia Units — 100 Mirvac Commercial No.3 Sub Trust Australia Units 100 100 Mirvac Funds Finance Pty Limited Australia Ordinary 100 100 Mirvac Funds Loan Note Pty Limited Australia Ordinary 100 100 Mirvac Glasshouse Sub-Trust Australia Units 100 100 Mirvac Group Funding No.2 Limited Australia Ordinary 100 100 Mirvac Group Funding No.3 Pty Limited Australia Ordinary 100 100 Mirvac Harbourside Sub Trust Australia Units 100 100 Mirvac Industrial Fund Australia Units 100 100 Mirvac Industrial No. 1 Sub Trust Australia Units 100 100 Mirvac Industrial No. 2 Sub Trust Australia Units 100 100 Mirvac Office Trust 7 Australia Units — 100 Mirvac Pitt Street Trust Australia Units 100 100 Mirvac Property Trust No.3 2 Australia Units 100 — Mirvac Property Trust No.4 2 Australia Units 100 — Mirvac Property Trust No.5 2 Australia Units 100 — Mirvac Property Trust No.6 2 Australia Units 100 — Mirvac Property Trust No.7 2 Australia Units 100 — Mirvac Real Estate Investment Trust Australia Units 100 100 Mirvac Retail Head Trust Australia Units 100 100 Mirvac Retail Sub-Trust No. 1 Australia Units 100 100 Mirvac Retail Sub-Trust No. 2 Australia Units 100 100 Mirvac Retail Sub-Trust No. 3 2 Australia Units 100 — Mirvac Retail Sub-Trust No. 4 2 Australia Units 100 — Mirvac Rhodes Sub-Trust Australia Units 100 100 Old Treasury Holding Trust Australia Units 100 100 Pennant Hills Office Trust Australia Units 100 100 Springfield Regional Shopping Centre Trust Australia Units 100 100 The George Street Trust Australia Units 100 100 The Mulgrave Trust Australia Units 100 100 WOT CMBS Pty Ltd 7 Australia Ordinary — 100 WOT Holding Trust 7 Australia Units — 100 WOT Loan Note Pty Ltd 7 Australia Ordinary — 100 WOW Office Trust 7 Australia Units — 100 1) These subsidiaries have been granted relief as at 30 June 2015 from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by ASIC. 2) These entities were established/registered during the year ended 30 June 2015. 3) These entities are included in the deed of cross guarantee; however, they are still required to lodge separate financial statements. 4) Previously registered as Green Square Consortium Pty Limited. The remaining 50 per cent was acquired by Mirvac on 11 August 2014 and this entity is now a controlled entity. 5) Previously registered as A.C.N. 151 466 241 Pty Ltd. 6) One unit on issue held by Mirvac Limited as custodian for MPT. 7) These entities were deregistered/wound up during the year ended 30 June 2015. 8) On 22 June 2015, 100 per cent of the units in these trusts were sold to an external party. 9) On 30 April 2014, 100 per cent of the units in this trust were exchanged for sale. Settlement occurred on 1 July 2014.

74 MIRVAC GROUP ANNUAL REPORT 2015 17 Controlled entities and deed of cross guarantee / continued c) Entities subject to class order Certain wholly-owned companies incorporated in Australia are permitted to be parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly-owned companies can be relieved from the requirements among other things to prepare a financial report and directors’ report under Class Order 98/1418 (as amended) issued by ASIC. The entities included at 30 June 2015 are listed in note 17(a). Companies identified in note 17(a) as being included in the Class Order are a “closed group” for the purpose of the Class Order, and as there are no other parties to the deed of cross guarantee that are controlled by the parent entity, they also represent the “extended closed group”. As a condition of the Class Order, the companies have entered into a deed of cross guarantee. The effect of the deed is that Mirvac Limited has guaranteed to pay any deficiency in the event of winding up of a company in the closed group. The companies in the closed group also have given a similar guarantee in the event that Mirvac Limited is wound up. The consolidated SoCI, a summary of movements in consolidated retained earnings and the consolidated SoFP for the year ended 30 June 2015 of the entities which are members of the closed group are as follows: 2015 2014 Consolidated SoCI $m $m

Revenue from continuing operations Investment properties rental revenue 19.7 16.4 Investment management fee revenue 35.7 33.1 Development and construction revenue 694.9 1,269.6 Development management fee revenue 13.5 15.9 Interest revenue 70.7 42.9 Other revenue 8.2 7.2 Total revenue from continuing operations 842.7 1,385.1

Other income Net gain on fair value of investment properties 15.1 7.5 Share of net profit of JVA accounted for using the equity method 7. 3 9.4 Gain on fair value of derivative financial instruments 187.6 7. 3 Foreign exchange gain — 7.2 Net gain on sale of investment properties 43.8 0.3 Total other income 253.8 31.7 Total revenue from continuing operations and other income 1,096.5 1,416.8 Net loss on sale of investment properties 0.2 — Net loss on sale of PPE 0.3 0.2 Foreign exchange loss 178.6 — Investment properties expenses 6.7 4.9 Cost of property development and construction 585.7 1,038.0 Employee benefits expenses 119.8 104.5 Depreciation and amortisation expenses 4.7 4.5 Impairment of loans, investments and inventories (0.1) (1.2) Finance costs 109.4 112.4 Loss on fair value of derivative financial instruments 8.8 25.5 Selling and marketing expenses 35.0 24.4 Other expenses 61.3 53.9 (Loss)/profit from continuing operations before income tax (13.9) 49.7 Income tax expense (18.1) (22.7) (Loss)/profit for the year (32.0) 27.0

2015 2014 Summary of movements in consolidated retained earnings $m $m

Movements in retained earnings Balance 1 July (1,372.7) (1,402.8) (Loss)/profit for the year (32.0) 27.0 SBP 1.5 (1.5) Retained loss from subsidiaries joining the group (60.1) — Transfer in from reserves — 4.6 Balance 30 June (1,463.3) (1,372.7)

MIRVAC GROUP ANNUAL REPORT 2015 75 Notes to the consolidated financial statements

17 Controlled entities and deed of cross guarantee / continued 2015 2014 Consolidated SoFP Note $m $m

Current assets Cash and cash equivalents 18.6 86.2 Receivables 756.7 388.6 Derivative financial assets — 9.2 Inventories 651.3 437.8 Other financial assets — 52.0 Other assets 13.7 14.9 Total current assets 1,440.3 988.7

Non-current assets Receivables 1,090.2 1,440.3 Inventories 651.5 620.8 Investments accounted for using the equity method 169.2 189.7 Derivative financial assets 175.9 11.3 Other financial assets 307.9 317.2 Investment properties 1 37.9 114.1 PPE 17.5 10.0 Intangible assets 2.6 2.6 Deferred tax assets 398.8 343.7 Total non-current assets 2,951.5 3,049.7 Total assets 4,391.8 4,038.4

Current liabilities Payables 712.1 450.0 Borrowings 0.2 2.9 Derivative financial liabilities 12.4 13.0 Provisions 20.3 8.3 Other liabilities 0.2 0.2 Total current liabilities 745.2 474.4

Non-current liabilities Payables 96.8 109.1 Borrowings 2,633.7 2,500.6 Derivative financial liabilities 76.0 98.7 Deferred tax liabilities 201.0 144.3 Provisions 1 7.1 3.5 Total non-current liabilities 3,024.6 2,856.2 Total liabilities 3,769.8 3,330.6 Net assets 622.0 707.8

Equity Contributed equity 19(a) 2,071.9 2,070.8 Reserves 13.4 9.7 Retained earnings (1,463.3) (1,372.7) Total equity 622.0 707.8

76 MIRVAC GROUP ANNUAL REPORT 2015 18 Parent entity financial information a) Summary financial information The individual financial statements for the parent entity show the following aggregate amounts: 2015 2014 Note $m $m

SoFP Current assets 4,209.3 3,651.5 Total assets 4,567.3 4,012.5 Current liabilities 2,478.7 1,925.5 Total liabilities 2,478.9 1,925.9 Equity Contributed equity 19(a) 2,071.9 2,070.8 Reserves — Capital reserve (0.2) (0.2) — SBP reserve 15.7 15.3 Retained earnings 1.0 0.7 Total equity 2,088.4 2,086.6

Profit/(loss) for the year 1.5 (0.5) Total comprehensive income for the year 1.5 (0.5) b) Guarantees entered into by the parent entity The parent entity is party to a deed of cross guarantee, with members of the closed group. Further details are disclosed in note 17(c). c) Contingent liabilities of the parent entity The parent entity did not have any other contingent liabilities other than the item referred to in note 18(b) at 30 June 2015 or 30 June 2014. d) Contractual commitments for the acquisition of PPE The parent entity did not have any contractual commitments for the acquisition of PPE at 30 June 2015 or 30 June 2014.

EQUITY 19 Contributed equity a) Paid up equity 2015 2014 Securities Securities 2015 2014 m m $m $m

Mirvac Limited — ordinary shares issued 3,694.3 3,688.5 2,071.9 2,070.8 MPT — ordinary units issued 3,694.3 3,688.5 4,732.4 4,726.0 Total contributed equity 6,804.3 6,796.8 b) Movements in paid up equity Movements in paid up equity of Mirvac for the year ended 30 June 2015 and 30 June 2014 were as follows: Securities Note m $m

Balance 1 July 2014 3,688.5 6,796.8 EEP securities issued 23 March 2015 $2.01 19(c) 0.4 0.8 LTP, LTIP and EIS securities converted, sold, vested or forfeited 19(c) 5.4 6.7 Balance 30 June 2015 3,694.3 6,804.3

Balance 1 July 2013 3,659.9 6,745.3 DRP securities issued 27 February 2014 $1.71 19(f) 26.9 46.0 EEP securities issued 20 March 2014 $1.72 19(c) 0.4 0.7 LTP, LTIP and EIS securities converted, sold, vested or forfeited 19(c) 1.3 5.3 Less: Transaction costs arising on issues of securities — (0.5) Balance 30 June 2014 3,688.5 6,796.8

Ordinary securities All ordinary securities were fully paid at 30 June 2015. Ordinary securities entitle the holder to participate in dividends/distributions and the proceeds on winding up of Mirvac in proportion to the number of and amount paid on the securities held. On a show of hands, every holder of ordinary securities present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each security is entitled to one vote.

MIRVAC GROUP ANNUAL REPORT 2015 77 Notes to the consolidated financial statements

19 Contributed equity / continued c) LTP, LTIP, EIS and EEP issues i) Current LTP At 30 June 2015, 26.6m (2014: 23.4m) performance rights and nil (2014: nil) options were issued to participants under the plan. The number of issued rights and options is net of adjustments due to forfeiture of rights and options as a result of termination of employment. During the year, 4.9m performance rights (2014: nil) and no options (2014: nil) vested. ii) EEP At 30 June 2015, 6.2m (2014: 5.8m) stapled securities have been issued to employees under the EEP. iii) Superseded LTI and EIS plans During the year, no securities were issued to employees of Mirvac Limited and its controlled entities under the superseded LTI plan and EIS (2014: nil). The total number of stapled securities issued to employees under the superseded LTI and EIS at 30 June 2015 was 3.3m (2014: 3.8m). The market price per ordinary stapled security at 30 June 2015 was $1.85 (2014: $1.79). Securities issued as part of the superseded LTI plan and EIS are not classified as ordinary securities, until such time as the vesting conditions are satisfied, employee loans are fully repaid or the employee leaves Mirvac. d) Reconciliation of securities issued on the ASX Under AAS, securities issued under the Mirvac employee LTI plan and EIS are required to be accounted for as an option and are excluded from total issued equity, until such time as the relevant employee loans are fully repaid or the employee leaves the Group. Total ordinary securities issued as detailed above is reconciled to securities issued on the ASX as follows: 2015 2014 Securities Securities m m

Total ordinary securities disclosed 3,694.3 3,688.5 Securities issued under LTI plan and EIS 3.3 3.8 Total securities issued on the ASX 3,697.6 3,692.3 e) Employee share scheme Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in note 25. f) Dividend reinvestment plan Under the DRP, holders of stapled securities may elect to have all or part of their distribution entitlements satisfied by the issue of new stapled securities rather than being paid in cash. Stapled securities issued under the plan were issued at a price calculated on a volume weighted average market price basis over the 15 business days commencing on the second business day post record date. g) Capital risk management Refer to note 14 for details of Mirvac’s capital risk management. 20 Reserves a) Reserves 2015 2014 $m $m ARR 68.5 59.0 Capital reserve (1.5) (1.5) Foreign currency translation reserve 4.2 (3.5) SBP reserve 15.7 15.3 NCI reserve 7.6 7.6 94.5 76.9

78 MIRVAC GROUP ANNUAL REPORT 2015 20 Reserves / continued b) Movements in reserves 2015 2014 Note $m $m

ARR Balance 1 July 59.0 65.8 Increment/(decrement) on revaluation of OOP 20(d) 9.5 (4.8) Transfers out to retained earnings 21 — (2.0) Balance 30 June 68.5 59.0

Capital reserve Balance 1 July (1.5) (0.3) Transfers out to retained earnings 21 — (1.2) Balance 30 June (1.5) (1.5)

Foreign currency translation reserve Balance 1 July (3.5) (3.8) Increase in reserve due to translation of foreign operations 9.1 3.4 Deferred tax 4(h) (1.4) 0.1 Transfers due to deconsolidation of entity — (3.2) Balance 30 June 4.2 (3.5)

SBP reserve Balance 1 July 15.3 10.5 Expense relating to SBP 0.4 4.4 Deferred tax 4(g) — 0.4 Balance 30 June 15.7 15.3

NCI reserve Balance 1 July 7.6 7.6 Balance 30 June 7.6 7.6 c) Nature and purpose of reserves i) ARR The ARR is used to record increments and decrements on the revaluation of OOP. However, any decrement in excess of previous increments is expensed to the consolidated SoCI. ii) Capital reserve The capital reserve was prior to the introduction of IFRS, and used to record the net revaluation increment or decrement on disposal of investment properties. The balance of the reserve may be transferred to retained earnings and used to satisfy distributions to securityholders. iii) Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled operations of the Group are taken to the foreign currency translation reserve, as described in note 30(c). iv) SBP reserve The SBP reserve is used to recognise the fair value of securities issued under LTI plans, securities issued under the EEP and any deficit resulting from the sale of securities under LTI plans. v) NCI reserve Transactions with NCI that do not result in a loss of control are accounted for through equity. The NCI reserve is used to record the difference between the fair value of the NCI acquired or disposed and any consideration paid/received. d) Reconciliation of movements between PPE to ARR 2015 2014 Note $m $m

Revaluation (increment)/decrement within PPE 8 (11.8) 2.2 Items adjusted to consolidated SoCI Items relating to OOP including fitout and lease amortisation 2.3 2.6 Balance transferred to ARR (9.5) 4.8 Items adjusted directly to reserves Transfers out to retained earnings 21 — 2.0 Movements in ARR (9.5) 6.8

MIRVAC GROUP ANNUAL REPORT 2015 79 Notes to the consolidated financial statements

21 Retained earnings 2015 2014 Note $m $m

Balance 1 July (697.6) (814.3) Profit for the year attributable to the stapled securityholders of Mirvac 609.9 447. 3 Items in other comprehensive income recognised in directly in retained earnings — Movements in security based compensation (1.4) (1.5) — Transfers due to deconsolidation of entity — (1.2) — Transfers in from capital reserve 20(b) — 1.2 — Transfers in from ARR due to retiring of OOP 20(b) — 2.0 Dividends/distributions provided for or paid 22 (347.6) (331.1) Balance 30 June (436.7) (697.6)

22 Dividends/distributions 2015 2014 Ordinary stapled securities $m $m

Half yearly ordinary distributions paid/payable as follows: 4.50 CPSS paid on 26 February 2015 (unfranked distribution) 166.4 — 4.40 CPSS paid on 27 February 2014 (unfranked distribution) — 161.3 4.90 CPSS payable on 26 August 2015 (unfranked distribution) 181.2 — 4.60 CPSS paid on 28 August 2014 (unfranked distribution) — 169.8 Total dividend/distribution 9.40 (2014: 9.00) CPSS 347.6 331.1

The DRP was activated for the 31 December 2013 half yearly distribution but was deactivated for the 30 June 2014 half yearly distribution and remains inactive. Distributions paid and payable in cash or satisfied by the issue of stapled securities under the Group’s DRP are as follows: 2015 2014 $m $m

Paid/payable in cash 347.6 285.1 Satisfied by the issue of stapled securities — 46.0 347.6 331.1

Franking credits available for subsequent years based on a tax rate of 30 per cent total $21.2m (2014: $15.8m on a tax rate of 30 per cent).

OTHER INFORMATION 23 Contingent liabilities a) Contingent liabilities The Group had contingent liabilities at 30 June 2015 in respect of the following: 2015 2014 $m $m

Bank guarantees and performance bonds issued by external parties in respect of certain performance obligations granted in the normal course of business. 1 27.4 155.1 The Group has provided guarantees to third parties in respect of the performance of entities within the Group. No material losses are anticipated in respect of these contractual obligations. — 1.2 Claims for damages in respect of injury sustained due to health and safety issues have been made during the year. The potential effect of these claims indicated by legal advice is that if the claims were to be successful against the Group, they would result in a liability. 1.2 1.0

As part of the ordinary course of business of the Group, disputes can arise with suppliers, customers and other third parties. Where there is a present obligation, a liability is recognised. Where there is a possible obligation, which will only be determined by a future event and it is not considered probable that a liability will arise, they are disclosed as a contingent liability. Where the possible obligation is remote, no disclosure is given. The Group does not provide details of these as to do so may prejudice the Group’s position. b) Guarantees For information about guarantees given by entities within the Group, including the parent entity, refer to notes 17 and 18. c) JVA There are no contingent liabilities relating to JVA.

80 MIRVAC GROUP ANNUAL REPORT 2015 24 Commitments a) Capital commitments 2015 2014 $m $m

Investment properties Not later than one year 81.0 66.5 Later than one year but not later than five years — — Later than five years — — 81.0 66.5

PPE Not later than one year — — Later than one year but not later than five years — — Later than five years — — — — b) Lease commitments 2015 2014 $m $m

Operating lease receivable 1 Future minimum rental revenues under non-cancellable operating property leases, are as follows: Not later than one year 488.9 451.6 Later than one year but not later than five years 1,446.3 1,500.6 Later than five years 1,191.1 913.3 3,126.3 2,865.5

1) Excludes storeroom licences, signage, telecommunications percentage and sundry income. Operating lease payable Commitments in relation to non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities, are payable as follows: Not later than one year 10.0 9.9 Later than one year but not later than five years 7.2 9.8 Later than five years 0.6 1.8 17.8 21.5

Finance leases Commitments in relation to finance leases are payable as follows: Not later than one year 0.2 3.0 Later than one year but not later than five years 0.1 0.2 Later than five years — — Residual — — Minimum lease payments 0.3 3.2 Less: Future finance charges — (0.1) Lease liabilities 0.3 3.1

Mirvac leases various plant and equipment with a carrying value of $0.1m (2014: $0.3m) under finance leases expiring in less than five years. 25 Employee benefits a) Employee benefits and related on-cost liabilities 2015 2014 Provision for employee benefits $m $m

Annual leave accrual 11.7 9.8 Current LSL 9.1 8.4 Non-current LSL 3.2 3.2 Aggregate employee benefit and related on-cost liabilities 24.0 21.4

The aggregate employee benefits and related on-cost liabilities include amounts for annual leave and LSL. The amount for LSL that is expected to be settled more than 12 months from the end of the year is measured at its present value.

MIRVAC GROUP ANNUAL REPORT 2015 81 Notes to the consolidated financial statements

25 Employee benefits / continued b) Superannuation commitments Mirvac offers employees based in Australia as part of their remuneration, the ability to participate in a staff superannuation plan managed by AustralianSuper. Employees are able to choose whether to participate in this plan or a qualifying plan of their choice. The plan provides lump sum benefits on retirement, disability or death for employees who are invited by their employer to join the plan. The plan is a defined contribution plan, which complies with relevant superannuation requirements. c) Employee security issues The total of all securities issued under all employee security schemes is limited to five per cent of the issued securities of the stapled group in any five year period. d) LTI plans i) EEP The EEP is designed to encourage security ownership across the broader employee population. It provides eligible employees with $1,000 worth of Mirvac securities at nil cost. The plan is open to Australian based employees with more than 12 months of continuous service, who do not participate in other Mirvac equity plans. Securities acquired under this plan are subject to a restriction on disposal until the earlier of three years after acquisition, or cessation of employment with the Group. Otherwise, holders enjoy the same rights and benefits as other holders of Mirvac’s stapled securities. On termination, employees retain any securities granted to them. At 30 June 2015, 6,267,141 stapled securities (2014: 5,844,194) had been issued to employees under the EEP. ii) Current plan — LTP The LTP was originally introduced in the year ended 30 June 2008 following approval by securityholders at the 2007 AGM. Securityholders approved an update to the LTP at the 2010 AGM. The purpose of the LTP is to drive performance, retain executives and facilitate executive security ownership. LTP grants are generally restricted to the executives who are most able to influence securityholder value. Executives are eligible, at the discretion of the HRC, to participate in the LTP. Non-Executive Directors are not eligible to participate in the LTP. Awards under this plan are made in the form of performance rights. Awards of options have also been made under this plan in previous years. A performance right is a right to acquire one fully paid stapled security in Mirvac provided a specified performance hurdle is met. No loans are made to participants under this plan. The Board reviews the performance conditions annually to determine the appropriate hurdles based on Mirvac’s strategy and prevailing market practice. This year, the Board determined, on the recommendation of the HRC, the vesting outcome for half of the LTP awards made in the year ended 30 June 2015 will depend on Mirvac’s TSR performance relative to the constituents of the comparison group, with the other half linked to Mirvac’s ROE performance. TSR was chosen given that it is an objective measure of securityholder value creation, and given its wide level of understanding and acceptance by the various key stakeholders. ROE was chosen as the second performance condition because it is aligned to Mirvac’s strategic drivers, in particular financial performance and capital efficiency. At 30 June 2015, 26,577,191 (2014: 23,366,336) performance rights and nil (2014: nil) options had been issued to participants under the LTP. The number of issued rights and options is net of adjustments due to forfeiture of rights and options as a result of termination of employment. A total of 4,917,598 performance rights (2014: nil) and nil options (2014: nil) vested during the year ended 30 June 2015. iii) Superseded plans There are four old plans now closed for new grants with the introduction of the LTP: ERP A small number of senior executives were invited to participate in the ERP. While the loans under this program were offered during the year ended 30 June 2009, some of the loan amounts were drawn down in the year ended 30 June 2010. The amounts of the loans range from $500,000 to $2,000,000 and must be secured against property or unconditional bank guarantee. A progressively increasing forgiveness schedule allows for no more than 50 per cent of the total loan balance in total to be forgiven. EIS Until 2006, Mirvac’s long term variable remuneration scheme for employees was the EIS. Open to all permanent employees, allocations were made annually, were unrestricted and fully vested on allotment. Existing arrangements remain in place until all current loans are repaid. The loans were repayable via distributions received on the securities or upon their sale. If an employee resigns or is dismissed, the outstanding loan balance must be paid when employment ceases. In the event of redundancy, retirement, total and permanent disablement or death, the employee has 12 months after employment ceases in which to repay the loan. If the loan value is greater than the value of the securities when the loan balance is due, the remaining balance is written off and the securities are forfeited. LTIP The LTIP was introduced in 2006 and approved by securityholders at the Group’s 2006 AGM. At this time, loan-funded incentive plans were common for entities with stapled securities due to the prevailing tax rules. Participation in the plan was open to the Managing Director, other Executive Directors, other executives and eligible employees. Participants were offered an interest-free loan which was applied to fund the acquisition of Mirvac’s stapled securities at market value. The term of the loan is eight years. Any loan balance outstanding at the end of the eighth year must be repaid at that time. The loan is reduced annually by applying the post-tax amounts of any distributions paid by Mirvac to the outstanding principal. The loans are interest free and non-recourse over their term. Two performance conditions had to be met before the securities vested in full: relative TSR and EPS growth. The satisfaction of each condition was given an equal weighting in terms of the total number of securities that may vest (that is, 50 per cent of the total securities held by a participant was subject to each performance condition). On vesting, 53.5 per cent of the original loan to fund the purchase of the vested securities was waived. The remaining balance of the loan will continue to be reduced by post- tax distributions until either the loan has been fully repaid or the eight year term expires, whichever occurs first. If a participant terminates their employment, any outstanding loans must be repaid in full immediately or the underlying securities will be forfeited.

82 MIRVAC GROUP ANNUAL REPORT 2015 25 Employee benefits / continued EIP The final loans under the EIP were offered during the year ended 30 June 2006. The amounts of the loans ranged from $50,000 to $800,000 with Mirvac holding security over the assets purchased with the loan proceeds. A progressively increasing forgiveness schedule applied which allowed the total loan balance to be forgiven if the employee remained employed on the final forgiveness date. The total outstanding loan balance under the EIP was $200,000 as at 1 July 2012. This amount was forgiven in accordance with the loan agreement during the year ended 30 June 2013. There are no outstanding loan amounts under the EIP as at 30 June 2015 and no further loans will be made under the EIP. e) SBP expense Total expenses arising from SBP transactions recognised during the year as part of employee benefits expenses were as follows: 2015 2014 $m $m

EEP 0.8 0.7 Current plan — LTP 3.7 5.4 Current plan — STI 1.1 0.4 Total 5.6 6.5 f) Fair value of SBP expense i) EEP The nature of the securities allotted under this plan is in substance similar to an option. The assessed fair value is taken to profit or loss as the securities vest immediately. SBP inputs for the EEP issued during the year EEP

Grant date 23 March 2015 Security price at grant date $2.01 ii) LTP Fair value at grant date has been independently determined using an option pricing model that takes into account the exercise price, the term of the securities, the current price of the underlying securities, the expected volatility of the security price, the expected dividend/distribution yield and the risk-free interest rate for the term of the security. The fair value of the SBP expense is calculated using a Monte-Carlo simulation. Assumptions used for the fair value of SBP expense are as follows: SBP inputs for the current LTP In valuing rights linked to the relative TSR measure, the key inputs for the 2015 grant were as follows: Performance rights

Grant date 17 December 2014 Performance hurdle Relative TSR and ROIC Performance period start 1 July 2014 Performance testing date 1 July 2017 Security price at grant date $1.79 Exercise price $nil Expected life 2.5 years Volatility 20% Risk-free interest rate (per annum) 2.2% Dividend/distribution yield (per annum) 5.0%

26 Related parties a) Controlled entities Interests in controlled entities are set out in note 17. b) KMP compensation 2015 2014 $m $m

Short term employment benefits 12.7 11.0 Post-employment benefits 0.3 0.2 SBP 2.3 1.8 Other long term benefits 0.1 0.1 15.4 13.1

Detailed remuneration disclosures are provided on pages 11 to 29 in the Remuneration report.

MIRVAC GROUP ANNUAL REPORT 2015 83 Notes to the consolidated financial statements

26 Related parties / continued c) Transactions with other related parties The following transactions occurred with related parties: 2015 2014 $000 $000

Transactions with JVA Interest income 13,858 17,764 Project development fees 2,505 807 Management and service fees 5,637 23,500 Construction billings 21,922 45,475 Responsible entity fees 6,078 7,609 d) Outstanding balances in relation to transactions with related parties The following balances are outstanding at the end of the year in relation to transactions with related parties: 2015 2014 $000 $000

Current receivables JVA 20,685 13,344 Non-current receivables JVA 23,612 32,489

During the year, impairment of receivables due from related parties was recognised $0.3m (2014: $2.0m) and the expense in respect of impaired receivables due from related parties was recognised within impairment of loans, investments and inventories in the consolidated SoCI. e) Loans to/from related parties 2015 2014 $m $m

Loans to directors and employees Beginning of the year 2.3 10.0 Loan repayments received (2.3) (6.3) Loan forgiveness — (1.4) End of year — 2.3

Amounts due from related parties Beginning of the year 45.8 83.5 Loans advanced 9.1 1.3 Loan repayments received (13.4) (16.8) Impairment recognised (0.3) (2.0) Transfers out — (23.2) Interest charged 3.1 3.0 End of year 44.3 45.8 f) Terms and conditions of outstanding balances Transactions relating to dividends/distributions are on the same terms and conditions that applied to other securityholders. The terms of the tax funding agreement are set out as per note 4(d). Other transactions were made on normal commercial terms and conditions with variable terms for the repayment and interest payable at market rates on the loans between the parties.

84 MIRVAC GROUP ANNUAL REPORT 2015 27 Remuneration of auditors During the year, the following fees were paid or payable for services provided by the auditor of the Group, its related practices and non-related audit firms: 2015 2014 $000 $000 a) Assurance services Audit services Audit and review of financial reports 1,793.0 1,813.1 Compliance services and regulatory returns 375.0 308.2 Total remuneration for assurance services 2,168.0 2,121.3 b) Taxation services Tax advice and compliance services 105.4 123.9 Total remuneration for taxation services 105.4 123.9 c) Advisory services Advisory services 107.2 15.9

28 Notes to the consolidated statement of cash flows 2015 2014 Note $m $m a) Reconciliation of cash Cash at the end of the year as shown in the consolidated statement of cash flows is the same as the consolidated SoFP: Cash at bank 59.6 67.6 Deposits at call 0.2 30.2 Cash and cash equivalents 59.8 97.8 b) Reconciliation of profit attributable to the stapled securityholders of Mirvac to net cash inflows from operating activities Profit attributable to the stapled securityholders of Mirvac 21 609.9 447. 3 Share of net profit of JVA not received as dividends/distributions (68.0) (46.9) Net gain on fair value of investment properties and IPUC 6 (140.8) (48.8) Net (gain)/loss on sale of investment properties (5.9) 6.0 Net loss on sale of PPE 0.3 0.2 Depreciation and amortisation expenses 3 30.4 29.6 Impairment of loans, investments, inventories and goodwill 3 (0.2) 23.3 SBP expense 5.6 6.5 Net loss/(gain) on fair value of derivative financial instruments (171.7) 23.3 Net loss/(gain) on foreign exchange 181.7 (7.5) JVA dividends/distributions received 41.6 17.6 Net gain on sale of investments 2 (10.2) — Change in operating assets and liabilities, net of effects from purchase of controlled entities: — Increase in income taxes payable — 0.4 — Increase in tax effected balances 13.5 12.4 — (Increase)/decrease in receivables (3.6) 53.7 — Increase in inventories (20.1) (33.1) — Increase in other assets/liabilities (6.6) (12.3) — Decrease in payables (49.1) (73.3) — Increase in provisions for employee benefits 5.9 0.9 Net cash inflows from operating activities 412.7 399.3

29 Events occurring after the end of the year No other circumstances have arisen since the end of the year which have significantly affected or may significantly affect the operations of Mirvac, the results of those operations, or the state of affairs of Mirvac in future years.

MIRVAC GROUP ANNUAL REPORT 2015 85 Notes to the consolidated financial statements

30 Summary of significant accounting policies v) Changes in ownership interests This note provides a list of all significant accounting policies The Group treats transactions with NCI that do not result in a adopted in the preparation of these consolidated financial loss of control as transactions with equity owners of the Group. statements. These policies have been consistently applied to A change in ownership interest results in an adjustment between all the years presented, unless otherwise stated. The financial the carrying amounts of the controlling and NCI to reflect their statements of Mirvac consist of the consolidated financial relative interests in the controlled entity. Any difference between statements of Mirvac Limited and its controlled entities the amount of the adjustment to NCI and any consideration paid including MPT and its controlled entities. or received is recognised in a separate reserve within equity attributable to the stapled securityholders of Mirvac. a) Principles of consolidation i) Controlled entities When the Group ceases to consolidate or equity account for an Controlled entities are all entities (including structured entities) investment because of loss of control, joint control or significant over which the Group has control. The Group controls an entity influence, any retained interest in the entity is remeasured to when the Group is exposed to, or has rights to, variable returns its fair value with the change in carrying amount recognised from its involvement with the entity and has the ability to affect in profit or loss. The fair value is the initial carrying amount those returns through its power to direct the activities of the for the purpose of subsequently accounting for the retained entity. Controlled entities are fully consolidated from the date on interest as a JVA or financial asset. In addition, any amounts which control is transferred to Mirvac. They are deconsolidated previously recognised in other comprehensive income in from the date that control ceases. The acquisition method of respect of that entity are accounted for as if Mirvac had directly accounting is used to account for the business combinations disposed of the related assets or liabilities. This may mean that undertaken by Mirvac (refer to note 30(g)). Inter-company amounts previously recognised in other comprehensive income transactions and balances between Mirvac entities are are reclassified to profit or loss. If the ownership interest in eliminated. Unrealised losses are also eliminated unless the a JVA is reduced but joint control or significant influence is transaction provides evidence of the impairment of the asset retained, only a proportionate share of the amounts previously transferred. Accounting policies of controlled entities have recognised in other comprehensive income are reclassified to been changed where necessary to ensure consistency with the profit or loss where appropriate. policies adopted by the Group. Non-controlling interests in the vi) Structured entities results and equity of controlled entities are shown separately A structured entity is an entity that has been designed so that in the consolidated SoCI, consolidated SoFP and consolidated voting or similar rights are not the dominant factor in deciding statement of changes in equity. who controls the entity. Mirvac considers that all funds and ii) Associates trusts in which it currently has an investment, or from which Associates are all entities over which Mirvac has significant it currently earns income, to be structured entities. Depending influence but not control or joint control, generally on the Group’s power over the activities of the entity and its accompanying a holding of between 20 per cent and 50 per cent exposure to and ability to influence its own returns, it may of the voting rights. Investments in associates are accounted consolidate the entity. In other cases, it may sponsor or have for in the consolidated financial statements using the equity exposure to such an entity but not consolidate it. method of accounting (see (iv) below), after initially being Certain wholly-owned companies incorporated in Australia are recognised at cost. permitted to be parties to a deed of cross guarantee. Refer to iii) Joint arrangements note 17 for further details of which wholly-owned companies Under AASB 11 Joint Arrangements, investments in joint are subject to the deed of cross guarantee. For those entities arrangements are classified as either joint operations or joint which are consolidated and which are not party to a deed of ventures. The classification depends on the contractual rights cross guarantee, Mirvac Limited does not have a contractual and obligations of each investor, rather than the legal structure of obligation to provide financial support. the joint arrangement. Mirvac has assessed the nature of its joint Mirvac invests in a number of funds and trusts. These arrangements and determined that it only has joint ventures. investments are open-end and closed-end investment funds iv) Equity method and trusts which invest in infrastructure and industrial real Under the equity method of accounting, the investments estate for the purpose of capital appreciation and/or to earn are initially recognised at cost and adjusted thereafter to investment income. The investees finance their operations recognise the Group’s share of the post-acquisition profits or through borrowings and through equity issues. Material losses of the investee in profit or loss, and the Group’s share of unconsolidated structured entities include the following: movements in other comprehensive income of the investee in — JF Infrastructure Yield Fund; and other comprehensive income. Dividends received or receivable — ASFI. from JVA are recognised as a reduction in the carrying amount of the investment. When Mirvac’s share of losses in an equity b) Segment reporting accounted investment equals or exceeds its interest in the Operating segments are reported in a manner consistent with entity, including any other unsecured receivables, Mirvac does the internal reporting provided to the chief operating decision not recognise further losses, unless it has incurred obligations maker. The chief operating decision maker, who is responsible or made payments on behalf of the other entity. for allocating resources and assessing performance of the operating segments, has been identified as the ELT. Unrealised gains on transactions between Mirvac and its JVA are eliminated to the extent of Mirvac’s interest in these entities. c) Foreign currency translation Unrealised losses are also eliminated unless the transaction i) Functional and presentation currency provides evidence of an impairment of the asset transferred. Items included in the financial statements of each of the Accounting policies of equity accounted investees have been Group’s entities are measured using the currency of the primary changed where necessary to ensure consistency with the economic environment in which the entity operates (“functional policies adopted by Mirvac. currency”). The consolidated financial statements are presented in Australian currency, which is Mirvac Limited’s functional and The carrying amount of equity accounted investments is tested for presentation currency. impairment in accordance with the policy described in note 30(h).

86 MIRVAC GROUP ANNUAL REPORT 2015 30 Summary of significant accounting policies / i) Development projects and land sales continued Revenue from the sale of development projects and land is ii) Transactions and balances recognised upon settlement, which has been determined to Foreign currency transactions are translated into the functional be when the significant risks and rewards of ownership are currency using the exchange rates prevailing at the dates of the transferred to the purchaser. Other revenue from development transactions. Foreign exchange gains and losses resulting from projects such as project management fees is recognised as the settlement of such transactions and from the translation services are performed. at year end exchange rates of monetary assets and liabilities ii) Construction contracts denominated in foreign currencies are recognised in profit or Agreements to develop real estate are only defined as loss, except when deferred in equity as qualifying cash flow construction contracts when the purchaser is able to specify hedges and qualifying net investment hedges or they are the main elements of the design of the project. Where this is attributable to part of the net investment in a foreign operation. not the case, the project is treated as a development project. Foreign exchange gains and losses that relate to borrowings Revenue and expenses are recognised in accordance with the are presented in the consolidated SoCI, within finance costs. percentage of completion method unless the outcome of the All other foreign exchange gains and losses are presented contract cannot be reliably estimated. The stage of completion in the consolidated SoCI on a net basis within other income is determined by costs incurred to date as a percentage of total or other expenses. Translation differences on non-monetary expected cost. Where it is probable that a loss will arise from financial assets and liabilities held at fair value are reported a construction contract, the excess of total costs over revenue as part of the fair value gain or loss using the exchange rate is recognised as an expense immediately. When the outcome applicable at the date fair value is determined. Translation of a contract cannot be reliably estimated, contract costs are differences on non-monetary financial assets and liabilities recognised as an expense as incurred, and where it is probable such as equities held at fair value through profit or loss are that the costs will be recovered, revenue is recognised to the recognised in profit or loss as part of the fair value gain or loss. extent of costs incurred. Translation differences on non-monetary financial assets such as equities classified as available for sale financial assets are iii) Rental income included in a fair value reserve in equity. Rental revenue for operating leases is recognised on a straight line basis over the term of the lease, except when an alternative iii) Group companies basis is more representative of the pattern of service rendered The results and financial position of entities (none of which through the provision of the leased premises. Lease incentives has the currency of a hyperinflationary economy) that have offered under operating leases are amortised on a straight line a functional currency different from the presentation currency basis in profit or loss. are translated into the presentation currency as follows: — assets and liabilities at the end of the reporting period are iv) Recoverable outgoings translated at the closing rate at the end of the reporting Recovery of outgoings as specified in lease agreements is period; accrued on an estimated basis and adjusted when the actual amounts are invoiced to the respective tenants. — income and expenses for each consolidated SoCI are translated at average exchange rates (unless this is not a v) Fees reasonable approximation of the cumulative effect of the rate Revenues from the rendering of property funds management, prevailing on the transaction dates, in which case income and property advisory and facilities management services are expenses are translated at the dates of the transactions); and recognised upon the delivery of the service to the customers — all resulting exchange differences are recognised in other or where there is a signed unconditional contract for the sale comprehensive income. or purchase of assets. On consolidation, exchange differences arising from the vi) Interest translation of any net investment in foreign entities, and Interest revenue is brought to account when earned, taking of borrowings and other financial instruments designated into account the effective yield on the financial asset. as hedges of such investments, are recognised in other vii) Dividends/distributions comprehensive income. When a foreign controlled entity is Dividends/distributions are recognised as revenue when the sold or any borrowings forming part of the net investment are right to receive payment is established. This applies even if they repaid, a proportionate share of such exchange differences is are paid out of pre-acquisition profits. However, the investment reclassified to profit or loss, as part of the gain or loss on sale may need to be tested for impairment as a consequence. where applicable. viii) Government grants Goodwill and fair value adjustments arising on the acquisition Grants from the government are recognised at their fair value of a foreign entity are treated as assets and liabilities of the where there is a reasonable assurance that the grant will be foreign entities and translated at the closing rate. received and the Group will comply with all attached conditions. d) Revenue recognition Government grants relating to costs are deferred and Revenue is measured at the fair value of the consideration recognised in profit or loss over the period necessary to match received or receivable. Amounts disclosed as revenue are net them with the costs that they are intended to compensate. of returns, trade allowances and duties and taxes paid. Mirvac e) Income tax recognises revenue when the amount of revenue can be reliably The income tax expense or benefit for the year is the tax measured, it is probable that future economic benefits will flow payable on the current year’s taxable income based on the to the entity and specific criteria have been met for each of applicable income tax rate for each jurisdiction adjusted by the Group’s activities as described below. The Group bases its changes in deferred tax assets and liabilities attributable to estimates on historical results, taking into consideration the type temporary differences between the tax bases of assets and of customer, the type of transaction and the specifics of each liabilities and their carrying amounts in the consolidated arrangement. Revenue is recognised for the major business financial statements and to unused tax losses. The current activities as follows: income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the controlled entities or JVA generate taxable incomes.

MIRVAC GROUP ANNUAL REPORT 2015 87 Notes to the consolidated financial statements

30 Summary of significant accounting policies / g) Business combinations continued The acquisition method of accounting is used to account Deferred tax assets and liabilities are recognised for temporary for all business combinations, regardless of whether equity differences at the tax rates expected to apply when the assets instruments or other assets are acquired. The consideration are recovered or liabilities are settled, based on those tax rates transferred for the acquisition of a controlled entity comprises which are enacted or substantively enacted. The relevant tax the fair values of the assets transferred, the liabilities incurred rates are applied to the cumulative amounts of deductible and and the equity interests issued by the Group. The consideration taxable temporary differences to measure the deferred tax transferred also includes the fair value of any contingent asset or liability. An exception is made for certain temporary consideration arrangement and the fair value of any pre-existing differences arising from the initial recognition of an asset or a equity interest in the controlled entity. Acquisition-related liability. No deferred tax asset or liability is recognised in relation costs are expensed as incurred. Identifiable assets acquired to these temporary differences if they arose in a transaction, and liabilities and contingent liabilities assumed in a business other than a business combination, that at the time of the combination are, with limited exceptions, measured initially at transaction did not affect either accounting profit or taxable their fair values at the acquisition date. On an acquisition-by- profit or loss. Deferred tax assets are recognised for deductible acquisition basis, the Group recognises any NCI in the acquiree temporary differences and unused tax losses only if it is either at fair value or at the NCI’s proportionate share of the probable that future taxable amounts will be available to utilise acquiree’s net identifiable assets. those temporary differences and losses. Deferred tax assets and The excess of the consideration transferred, the amount of any liabilities are not recognised for temporary differences between NCI in the acquiree and the acquisition-date fair value of any the carrying amount and tax bases of investments in controlled previous equity interest in the acquiree over the fair value of the entities where the parent entity is able to control the timing Group’s share of the net identifiable assets acquired is recorded of the reversal of the temporary differences and it is probable as goodwill. If those amounts are less than the fair value of that the differences will not reverse in the foreseeable future. the net identifiable assets of the controlled entity acquired Current tax assets and tax liabilities are offset where the entity and the measurement of all amounts has been reviewed, the has a legally enforceable right to offset and intends either difference is recognised directly in profit or loss as a discount to settle on a net basis, or to realise the asset and settle the on business combination. Where settlement of any part of cash liability simultaneously. Mirvac and its wholly-owned Australian consideration is deferred, the amounts payable in the future are controlled entities have implemented the tax consolidation discounted to their present value at the date of exchange. The legislation. As a consequence, these entities are taxed as discount rate used is the entity’s incremental borrowing rate, a single entity and the deferred tax assets and liabilities being the rate at which a similar borrowing could be obtained of these entities are recorded in the consolidated financial from an independent financier under comparable terms and statements. Current and deferred tax is recognised in profit conditions. Contingent consideration is classified either as or loss, except to the extent that it relates to items recognised equity or a financial liability. Amounts classified as a financial in other comprehensive income or directly in equity. In this liability are subsequently remeasured to fair value, with changes case, the tax is also recognised in other comprehensive income in fair value recognised in profit or loss. or directly in equity respectively. If the business combination is achieved in stages, the i) Investment allowances acquisition-date carrying value of the Group’s previously held Companies within the Group may be entitled to claim special equity interest in the controlled entity is remeasured to fair tax deductions for investments in qualifying assets. The Group value at the acquisition date. Any gains or losses arising from accounts for such allowances as tax credits, which means that such remeasurement are recognised in profit or loss. the allowance reduces income tax payable and current tax h) Impairment of assets expense. A deferred tax asset is recognised for unclaimed tax Goodwill and intangible assets that have an indefinite useful credits that are carried forward as deferred tax assets. life are not subject to amortisation and are tested annually f) Leases for impairment or more frequently if events or changes in Leases of PPE where Mirvac has substantially all the risks and circumstances indicate that they might be impaired. Other rewards of ownership are classified as finance leases. Finance assets are tested for impairment whenever events or changes leases are capitalised at the lease’s inception at the lower of the in circumstances indicate that the carrying amount may not be fair value of the leased property and the present value of the recoverable. An impairment loss is recognised for the amount minimum lease payments. The corresponding rental obligations, by which the asset’s carrying amount exceeds its recoverable net of finance charges, are included in other short term or long amount. The recoverable amount is the higher of an asset’s term payables. Each lease payment is allocated between the fair value less costs to sell, and value in use. In assessing value liability and finance costs. The finance costs are charged to the in use, the estimated future cash flows are discounted to their profit or loss over the lease period so as to produce a constant present value using the post-tax discount rate that reflects periodic rate of interest on the remaining balance of the liability current market assessments of both the time value of money for each period. The PPE acquired under finance leases is and the risk specific to the asset for which the estimates of depreciated over the shorter of the asset’s useful life and the future cash flows have not been adjusted. An impairment loss lease term if there is no reasonable certainty that the Group is recognised for the amount by which the asset’s (or CGU) will obtain ownership at the end of the lease term. Leases in carrying amount exceeds its recoverable amount. For the which a significant portion of the risks and rewards of ownership purpose of assessing impairment, assets are grouped at the are retained by the lessor, are classified as operating leases. lowest levels for which there are separately identifiable cash Payments made under operating leases (net of any incentives flows which are largely independent of the cash inflows from received from the lessor) are charged to profit or loss on a other assets or groups of assets (CGUs). The lowest level at straight line basis over the period of the lease. Lease income which Mirvac allocates and monitors goodwill is at the primary from operating leases where the Group is a lessor is recognised reporting segments level (refer to note 1). in income on a straight line basis over the lease term. Refer to note 30(d)(iii).

88 MIRVAC GROUP ANNUAL REPORT 2015 30 Summary of significant accounting policies / Borrowing costs included in the cost of land are those costs that continued would have been avoided if the expenditure on the acquisition i) Cash and cash equivalents and development of the land had not been made. Borrowing For the purpose of presentation in the consolidated statement costs incurred while active development is interrupted for of cash flows, cash and cash equivalents includes cash on hand, extended periods are recognised as expenses. deposits held at call with financial institutions, other short ii) Construction contracts term, highly liquid investments with original maturities of three Construction work in progress is stated at the aggregate months or less that are readily convertible to known amounts of contract costs incurred to date plus recognised profits of cash and which are subject to an insignificant risk of changes less recognised losses and progress billings. If there are in value, and bank overdrafts. Bank overdrafts are shown within contracts where progress billings exceed the aggregate borrowings in current liabilities on the consolidated SoFP. costs incurred plus profits less losses, the net amounts are j) Trade receivables presented under payables. Contract costs include all costs Trade receivables are amounts due from customers for goods directly related to specific contracts and costs that are sold or services performed in the ordinary course of business. specifically chargeable to the customer under the terms If collection of the amounts is expected in one year or less, of the contract. The stage of completion is measured using they are classified as current assets. If not, they are presented the percentage of completion method unless the outcome as non-current assets. Trade receivables are generally due of the contract cannot be reliably measured. for settlement within 30 days and therefore are all classified m) Non-current assets (or disposal groups) as current. Trade receivables are recognised initially at fair classified as held for sale value and subsequently measured at amortised cost using Non-current assets (or disposal groups) are classified as held the effective interest method, less provision for impairment. for sale if their carrying amount will be recovered principally Collectability of trade receivables is reviewed on an ongoing through a sale transaction rather than through continuing use basis. Receivables which are known to be uncollectible are and a sale is considered highly probable. They are measured written off by reducing the carrying amount directly. A separate at the lower of their carrying amount, and fair value less costs provision for impairment of trade receivables is established to sell, except for assets such as deferred tax assets, financial when there is objective evidence that Mirvac will not be able assets and investment properties that are carried at fair value. to collect all amounts due according to the original terms of An impairment loss is recognised for any initial or subsequent receivables. The Group considers that there is evidence of write-down of the asset (or disposal group) to fair value less impairment if any of the following indicators are present: costs to sell. A gain is recognised for any subsequent increases — significant financial difficulties of the debtor; in fair value less costs to sell of an asset (or disposal group), — probability that the debtor will enter bankruptcy but not in excess of any cumulative impairment loss previously or financial reorganisation; and recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) — default or delinquency in payments is recognised at the date of derecognition. (more than 30 days overdue). Non-current assets (including those that are part of a disposal The amount of the provision is the difference between the group) are not depreciated or amortised while they are classified asset’s carrying amount, and the present value of estimated as held for sale. Interest and other expenses attributable to the future cash flows discounted at the effective interest rate. liabilities of a disposal group classified as held for sale continue Cash flows relating to short term receivables are not discounted to be recognised. Non-current assets classified as held for sale if the effect of discounting is immaterial. The amount of the and the assets of a disposal group classified as held for sale provision is recognised in profit or loss within other expenses. are presented separately from other assets in the consolidated When a trade receivable for which an impairment provision had SoFP. The liabilities of a disposal group classified as held for been recognised becomes uncollectible in a subsequent period, sale are presented separately from other liabilities in the it is written off against the provision account. Subsequent consolidated SoFP. recoveries of amounts previously written off are credited A disposal group is a component of the entity that has been against other expenses in profit or loss. See note 30(n) for disposed of or is classified as held for sale and that represents information about how impairment losses are calculated. a separate major line of business or geographical area of k) Mezzanine loans operations, is part of a single coordinated plan to dispose of Mezzanine loans are loans to unrelated parties for predominately such a line of business or area of operations, or is a subsidiary real estate property development. These loans are secured acquired exclusively with a view to resale. The results of a by a second ranking mortgage, behind that of the senior disposal group are shown as discontinued operations and are lender. Mezzanine loans are recognised initially at fair value. presented separately in the consolidated SoCI. The comparatives Collectability of loans is reviewed on an ongoing basis and those in the consolidated SoCI are restated to include the profit or loss which are considered uncollectible are written off to profit or loss. of the disposal group in discontinued operations. l) Inventories n) Investments and other financial assets Inventories comprise development projects and construction i) Classification contracts. Mirvac classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and i) Development projects receivables, held-to-maturity investments and available-for-sale Development projects are valued at the lower of cost and NRV. financial assets. The classification depends on the purpose for Cost includes the costs of acquisition, development, borrowings which the investments were acquired. Management determines and all other costs directly related to specific projects, including the classification of its investments at initial recognition and, in an allocation of direct overhead expenses. Upon completion of the case of assets classified as held to maturity, re-evaluates this the contract of sale, borrowing costs and other holding charges designation at the end of each reporting period. are expensed as incurred. Profits on development projects are not brought to account until settlement of the contract of sale.

MIRVAC GROUP ANNUAL REPORT 2015 89 Notes to the consolidated financial statements

30 Summary of significant accounting policies / iii) Recognition and derecognition continued Regular way purchases and sales of investments are recognised — Financial assets at fair value through profit or loss on trade date, being the date on which Mirvac commits to Financial assets classified as held for trading are included purchase or sell the asset. Financial assets are derecognised in the category “financial assets at fair value through profit when the rights to receive cash flows from the financial or loss”. Financial assets are classified as held for trading if assets have expired or have been transferred and Mirvac has they are acquired for the purpose of selling in the near term. transferred substantially all the risks and rewards of ownership. Derivatives are also categorised as held for trading unless When securities classified as available for sale are sold, the they are designated as hedges. Assets in this category are accumulated fair value adjustments recognised in other classified as current assets if they are expected to be settled comprehensive income are reclassified to profit or loss as within 12 months; otherwise, they are classified as non-current. gains and losses from investment securities. — Loans and receivables iv) Measurement Loans and receivables are non-derivative financial assets with At initial recognition, the Group measures a financial asset fixed or determinable payments that are not quoted in an at its fair value plus, in the case of a financial asset not at fair active market. They arise when Mirvac provides money, goods value through profit or loss, transaction costs that are directly or services directly to a debtor with no intention of selling attributable to the acquisition of the financial asset. Transaction the receivable. They are included in current assets, except for costs of financial assets carried at fair value through profit those with maturities greater than 12 months after the end or loss are expensed in profit or loss. Loans and receivables of the reporting period which are classified as non-current and held-to-maturity investments are subsequently carried assets. Loans and receivables are included in receivables in at amortised cost using the effective interest method. the consolidated SoFP, except where the amount relates to the Available-for-sale financial assets and financial assets at fair funding of investment structures, which are disclosed separately. value through profit or loss are subsequently carried at fair — Held-to-maturity investments value. Gains or losses arising from changes in the fair value Held-to-maturity investments are non-derivative financial assets are recognised as follows: with fixed or determinable payments and fixed maturities that — for financial assets at fair value through profit or loss — Mirvac’s management has the positive intention and ability in profit or loss within other income or other expenses; to hold to maturity. If the Group were to sell other than an — for available-for-sale financial assets that are monetary insignificant amount of held-to-maturity financial assets, the securities denominated in a foreign currency — translation whole category would be tainted and reclassified as available differences related to changes in the amortised cost of for sale. Held-to-maturity financial assets are included in the security are recognised in profit or loss and other non‑current assets, except for those maturities less than changes in the carrying amount are recognised in other 12 months from the end of the reporting period, which are comprehensive income; and classified as current assets. — for other monetary and non-monetary securities classified — Available-for-sale financial assets as available for sale — in other comprehensive income. Available-for-sale financial assets, comprising principally Dividends on financial assets at fair value through profit or marketable equity securities, are non-derivatives that are either loss and available-for-sale equity instruments are recognised designated in this category or not classified in any of the other in profit or loss as part of revenue from continuing operations categories. They are included in non-current assets unless the when the Group’s right to receive payments is established. investment matures, or management intends to dispose of the Interest income from financial assets at fair value through profit investment, within 12 months of the end of the reporting period. or loss is included in the net gain/(loss). Interest on available- Investments are designated as available for sale if they do not for-sale securities calculated using the effective interest method have fixed maturities and fixed or determinable payments and is recognised in the profit or loss as part of revenue from management intends to hold them for the medium to long term. continuing operations. Details on how the fair value of financial ii) Reclassification instruments is determined are disclosed in note 31(b)(viii). The Group may choose to reclassify a non-derivative trading v) Impairment financial asset out of the held-for-trading category if the The Group assesses at the end of each reporting period whether financial asset is no longer held for the purpose of selling it in there is objective evidence that a financial asset or group of the near term. Financial assets other than loans and receivables financial assets is impaired. A financial asset or group of financial are permitted to be reclassified out of the held-for-trading assets is impaired and impairment losses are incurred only if category only in rare circumstances arising from a single there is objective evidence of impairment as a result of one or event that is unusual and highly unlikely to recur in the near more events that occurred after the initial recognition of the term. In addition, the Group may choose to reclassify financial asset (“loss event”) and that loss event (or events) has an impact assets that would meet the definition of loans and receivables on the estimated future cash flows of the financial asset or group out of the held-for-trading or available-for-sale categories if of financial assets that can be reliably estimated. In the case of the Group has the intention and ability to hold these financial equity investments classified as available for sale, a significant assets for the foreseeable future or until maturity at the date or prolonged decline in the fair value of the security below its of reclassification. Reclassifications are made at fair value as cost is considered an indicator that the assets are impaired. of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before the reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively.

90 MIRVAC GROUP ANNUAL REPORT 2015 30 Summary of significant accounting policies / is recognised in profit or loss within other income or other continued expenses. If the hedge no longer meets the criteria for hedge — Assets carried at amortised cost accounting, the adjustment to the carrying amount of a hedged For loans and receivables, the amount of the loss is measured item for which the effective interest method is used is amortised as the difference between the asset’s carrying amount, and to profit or loss over the period to maturity using a recalculated the present value of estimated future cash flows (excluding effective interest rate. future credit losses that have not been incurred) discounted ii) Cash flow hedges at the financial asset’s original effective interest rate. The The effective portion of changes in the fair value of derivatives carrying amount of the asset is reduced and the amount of the that are designated and qualify as cash flow hedges is loss is recognised in profit or loss. If a loan or held-to-maturity recognised in other comprehensive income and accumulated investment has a variable interest rate, the discount rate for in reserves in equity. The gain or loss relating to the ineffective measuring any impairment loss is the current effective interest portion is recognised immediately in profit or loss. Amounts rate determined under the contract. As a practical expedient, the accumulated in equity are reclassified to profit or loss in the Group may measure impairment on the basis of an instrument’s periods when the hedged item will affect profit or loss (for fair value using an observable market price. If, in a subsequent instance, when the forecast sale that is hedged takes place). period, the amount of the impairment loss decreases and the However, when the forecast transaction that is hedged results decrease can be related objectively to an event occurring after in the recognition of a non-financial asset (for example, the impairment was recognised (such as an improvement in the inventories) or a non-financial liability, the gains and losses debtor’s credit rating), the reversal of the previously recognised previously deferred in equity are transferred from equity and impairment loss is recognised in profit or loss. Impairment included in the measurement of the initial cost or carrying testing of trade receivables is described in note 30(j). amount of the asset or liability. When a hedging instrument — Assets classified as available for sale expires or is sold or terminated, or when a hedge no longer If there is objective evidence of impairment for available- meets the criteria for hedge accounting, any cumulative gain for-sale financial assets, the cumulative loss — measured as or loss existing in equity at that time remains in equity and the difference between the acquisition cost and the current is recognised when the forecast transaction is ultimately fair value, less any impairment loss on that financial asset recognised in profit or loss. When a forecast transaction is no previously recognised in profit or loss — is removed from equity longer expected to occur, the cumulative gain or loss that was and recognised in profit or loss. Impairment losses on equity reported in equity is immediately transferred to profit or loss. instruments that were recognised in profit or loss are not iii) Derivatives that do not qualify for hedge accounting reversed through profit or loss in a subsequent period. If the Certain derivative instruments do not qualify for hedge fair value of a debt instrument classified as available for sale accounting. Changes in the fair value of any derivative increases in a subsequent period and the increase can be instrument that does not qualify for hedge accounting objectively related to an event occurring after the impairment are recognised immediately in profit or loss. loss was recognised in profit or loss, the impairment loss is reversed through profit or loss. p) PPE PPE comprises land and buildings, plant and equipment o) Derivatives and hedging activities and OOP. Increases in the carrying amounts arising on the Derivatives are initially recognised at fair value on the date revaluation of certain classes of PPE are credited, net of tax, a derivative contract is entered into and are subsequently in other comprehensive income and accumulated in reserves remeasured to their fair value at the end of each reporting in equity. To the extent that the increase reverses a decrease period. The method of recognising the resulting gain or loss previously recognised in profit or loss, the increase is first depends on whether the derivative is designated as a hedging recognised in profit or loss. Decreases that reverse previous instrument, and if so, the nature of the item being hedged. increases of the same asset are first recognised in other Mirvac designates certain derivatives as either: (1) hedges of the comprehensive income to the extent of the remaining surplus fair value of recognised assets, liabilities or firm commitments attributable to the asset; all other decreases are charged to (“fair value hedges”); or (2) hedges of highly probable forecast profit or loss. Each year, the difference between depreciation transactions (“cash flow hedges”). Mirvac documents at based on the revalued carrying amount of the asset charged to the inception of the transaction the relationship between profit or loss and depreciation based on the asset’s original cost, hedging instruments and hedged items, as well as its risk net of tax, is reclassified from the PPE revaluation surplus to management objective and strategy for undertaking various retained earnings. hedge transactions. Mirvac also documents its assessment, both at hedge inception and on an ongoing basis, of whether i) Plant and equipment the derivatives that are used in hedging transactions have been Plant and equipment is stated at historical cost less and will continue to be highly effective in offsetting changes depreciation. Historical cost includes expenditure that is directly in fair values or cash flows of hedged items. The fair values attributable to the acquisition of the items. of various derivative financial instruments used for hedging ii) OOP purposes are disclosed in note 15. The full fair value of a Properties are classified as owner-occupied where Mirvac hedging derivative is classified as a non-current asset or liability occupies more than 10 per cent of the total lettable area of the when the remaining maturity of the hedged item is more than individual property. OOP are shown at fair value, less subsequent 12 months; it is classified as a current asset or liability when the depreciation for buildings. Fair values are determined by remaining maturity of the hedged item is less than 12 months. external valuers on a rotation basis with one-half of the portfolio i) Fair value hedges being valued annually. Those assets which are not subject Changes in the fair value of derivatives that are designated to an external valuation at the end of the reporting period and qualify as fair value hedges are recorded in profit or loss, are fair valued internally by management. Any accumulated together with any changes in the fair value of the hedged asset depreciation at the date of revaluation is eliminated against or liability that are attributable to the hedged risk. The gain the gross carrying amount of the asset and the net amount is or loss relating to the effective portion of interest rate swaps revalued to fair value. hedging fixed rate borrowings is recognised in profit or loss within finance costs, together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion

MIRVAC GROUP ANNUAL REPORT 2015 91 Notes to the consolidated financial statements

30 Summary of significant accounting policies / ii) Management rights continued Management rights which have an indefinite useful life are not Land is not depreciated. Depreciation on other assets is amortised but tested annually for impairment. calculated using the straight line method to allocate their cost s) Trade and other payables or revalued amounts, net of their residual values, over their These amounts represent liabilities for goods and services estimated useful lives, as follows: provided to Mirvac prior to the end of the year which are unpaid. — buildings 40 years The amounts are unsecured and are usually paid within 30 days — plant and equipment 3-15 years of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months — office leasehold improvements 1-10 years. from the reporting date. They are recognised initially at fair The assets’ residual values and useful lives are reviewed, and value and subsequently measured at amortised cost using the adjusted if appropriate, at the end of each reporting period. effective interest method. An asset’s carrying amount is written down immediately to its t) Borrowings and borrowing costs recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (refer to note 30(h)). Gains Borrowings are initially recognised at fair value, net of and losses on disposals are determined by comparing proceeds transaction costs incurred. Borrowings are subsequently with carrying amount. These are included in profit or loss on measured at amortised cost. Any difference between the a net basis when the risks and rewards pass to the purchaser. proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of q) Investment properties the borrowings using the effective interest method. Fees i) Investment properties paid on the establishment of loan facilities, which are not Investment properties are properties held for long term rental an incremental cost relating to the actual drawdown of the yields and for capital appreciation. Investment properties are facility, are recognised as prepayments and amortised on a carried at fair value with any gain or loss arising from a change straight line basis over the term of the facility. Borrowings in fair value recognised in the consolidated SoCI. The carrying are removed from the consolidated SoFP when the obligation amount of the investment properties recorded in the consolidated specified in the contract is discharged, cancelled or expired. SoFP includes components relating to lease incentives. Borrowings are classified as current liabilities unless Mirvac has an unconditional right to defer settlement of the liability Investment properties also include properties that are under for at least 12 months after the end of the reporting period. construction for future use as investment properties. These General and specific borrowing costs that are directly are carried at fair value unless the fair value cannot yet be attributable to the acquisition, construction or production of reliably determined. Where that is the case, the property will a qualifying asset are capitalised during the period of time that be accounted for at cost until either the fair value becomes is required to complete and prepare the asset for its intended reliably determinable or construction is complete. The fair value use or sale. Qualifying assets are assets that necessarily take of IPUC is determined by using estimation models including a substantial period of time to get ready for their intended use residual valuations. The estimated value of future assets is or sale. Investment income earned on the temporary investment based on the expected future income from the project, using of specific borrowings pending their expenditure on qualifying current yields of similar completed properties. The remaining assets is deducted from the borrowing costs eligible for expected costs of completion plus risk adjusted development capitalisation. Other borrowing costs are expensed. margin are deducted from the estimated future asset value. u) Employee benefits ii) Investment properties under redevelopment i) Wages and salaries, annual leave and sick leave Existing investment properties being redeveloped for Liabilities for wages and salaries, including non-monetary continued future use are carried at fair value. benefits, and annual leave expected to be settled within iii) Lease incentives 12 months of the end of the reporting period in which the Lease incentives provided under an operating lease by employees render the related service, are recognised in other the Group as lessor are recognised on a straight line basis creditors and accruals in respect of employees’ services up against rental income. As these incentives are repaid out of to the end of the reporting period and are measured at the future lease payments, they are recognised as an asset in the amounts expected to be paid when the liabilities are settled. consolidated SoFP as a component of the carrying amount Liabilities for accumulating sick leave are recognised when of investment properties and amortised over the lease period. the leave is taken and measured at the rates paid or payable. Where the investment property is supported by a valuation ii) LSL that incorporates the value of lease incentives, the investment The liability for LSL vesting within 12 months of the end of the property is revalued back to the valuation amount after the reporting period is recognised and is measured in accordance lease incentive amortisation has been charged as an expense. with (i) above and included in provisions. The liability for LSL r) Intangible assets vesting more than 12 months from the end of the reporting period i) Goodwill is recognised and measured as the present value of expected Goodwill represents the excess of the cost of an acquisition future payments to be made in respect of services provided over the fair value of Mirvac’s share of the net identifiable by employees up to the end of each reporting period using the assets of the acquired controlled entity or JVA at the date of projected unit credit method. Consideration is given to expected acquisition. Goodwill on acquisition of controlled entities is future wage and salary levels, experience of employee departures included in intangible assets. Goodwill on acquisition of JVA is and periods of service. Expected future payments are discounted included in investments in JVA. Goodwill acquired in business using interest rates attaching, at the end of the reporting period, combinations is not amortised. Instead, goodwill is tested for to corporate bond rates with terms to maturity that match, impairment annually or more frequently if events or changes in as closely as possible, the estimated future cash flows. circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGU that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segments (refer to note 1).

92 MIRVAC GROUP ANNUAL REPORT 2015 30 Summary of significant accounting policies / v) Provisions continued Provisions for legal claims, contracts and make good iii) SBP obligations are recognised when the Group has a present SBP are recognised for the following plans: legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to Current LTI settle the obligation and the amount has been reliably estimated. The fair value at grant date is independently determined using Provisions are not recognised for future operating losses. a Monte-Carlo simulation that takes into account the exercise Where there are a number of similar obligations, the likelihood price, the vesting and performance criteria, the impact of that an outflow will be required in settlement is determined dilution, the security price at grant date and expected price by considering the class of obligations as a whole. A provision volatility of the underlying security, the expected dividend is recognised even if the likelihood of an outflow with respect yield and the risk-free interest rate for the term of the equity to any one item included in the same class of obligations may instrument. The fair value is then expensed on a straight line be small. Provisions are measured at the present value of basis over the vesting period of equity instruments. management’s best estimate of the expenditure required to EEP settle the present obligation at the end of the reporting period. Security based charges relating to the securities issued under The discount rate used to determine the present value reflects the EEP are included in profit or loss in the year in which the current market assessments of the time value of money and securities are granted with a corresponding increase to Mirvac’s the risks specific to the liability. The increase in the provision contributed equity. due to the passage of time is recognised as interest expense. Superseded plans Provisions for restructuring are recognised when the Group The fair value of equity instruments granted under the superseded has approved a detailed and formal restructuring plan, LTI plan and EIS is recognised in employee benefits expenses and the restructuring has either commenced or has been with a corresponding increase in equity. The fair value is announced publicly. measured at grant date and recognised over the vesting period. w) Contributed equity iv) STI Ordinary securities are classified as equity. Incremental costs STI awards for most employees are made in the form of cash, directly attributable to the issue of new securities or options are while 25 per cent of STI awards for ELT members are paid in shown in equity as a deduction, net of tax, from the proceeds. the form of unhurdled rights over Mirvac securities. The vesting Incremental costs directly attributable to the issue of new period for 50 per cent of these unhurdled rights is 12 months, securities or options, or for the acquisition of a business, are not with the balance vesting after 24 months. For the cash position included in the cost of the acquisition as part of the purchase of STI awards, a liability for STI payable is recognised in accruals consideration. In accordance with AASB 2 Share-Based Payment, where there is a present obligation to settle the liability and at securities issued as part of the LTI plan and EIS are not classified least one of the following conditions is met: as ordinary securities, until such time as the employee loans are fully repaid or the employee leaves Mirvac. If Mirvac reacquires — there are formal terms for determining the amount its own equity instruments (for example, as the result of a of the benefit; security buy-back), those instruments are deducted from equity — the amounts to be paid are determined before the time and the associated securities are cancelled. No gain or loss is of completion of the consolidated financial statements; or recognised in profit or loss and the consideration paid including — past practice gives clear evidence of the amount any directly attributable incremental costs (net of income taxes) of the obligation. is recognised directly in equity. Liabilities for cash STI awards are expected to be settled x) Distributions within 12 months and are measured at the amounts expected Provision is made for the amount of any distribution declared to be paid when they are settled. The liabilities for the portion at or before the end of the year but not distributed at the end of STI awards paid as deferred rights over Mirvac securities of the year. are measured at the fair value and amortised to share based y) EPS expenses over the relevant vesting period. i) Basic EPS v) Termination benefits Basic EPS is calculated by dividing the profit attributable to Termination benefits are payable when employment is securityholders of the Group by the weighted average number terminated by Mirvac before the normal retirement date, or of ordinary securities outstanding during the year. In calculating when an employee accepts voluntary redundancy in exchange basic EPS, securities issued under the EIS have been excluded for these benefits. Mirvac recognises termination benefits at from the weighted average number of securities. the earlier of the following dates: (a) when Mirvac can no longer ii) Diluted EPS withdraw the offer of those benefits; and (b) when Mirvac recognises costs for a restructuring that is within the scope Diluted EPS adjusts the figures used in the determination of AASB 137 Provisions, Contingent Liabilities and Contingent of basic EPS to take into account the after income tax effect Assets and involves the payment of terminations benefits. In of interest and other financing costs associated with dilutive the case of an offer made to encourage voluntary redundancy, potential ordinary securities (including those securities issued the termination benefits are measured based on the number under the EIS) and the weighted average number of securities of employees expected to accept the offer. Benefits falling due assumed to have been issued for no consideration in relation more than 12 months after the end of the reporting period are to dilutive potential ordinary securities. discounted to present value. z) Parent entity financial information vi) Retirement benefit obligations The financial information for the parent entity, Mirvac Limited, Contributions to the defined contribution fund are recognised disclosed in note 18 has been prepared on the same basis as the as an expense as they become payable. Prepaid contributions consolidated financial statements, except as set out below: are recognised as an asset to the extent that a cash refund i) Investments in controlled entities and JVA or a reduction in the future payments is available. Investments in controlled entities and JVA are accounted for at cost in the financial statements of Mirvac Limited. Dividends/ distributions received from JVA are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

MIRVAC GROUP ANNUAL REPORT 2015 93 Notes to the consolidated financial statements

30 Summary of significant accounting policies / ii) AASB 15 Revenue from Contracts with Customers continued This standard will replace AASB 118 Revenue which covers ii) Tax consolidation legislation contracts for goods and services and AASB 111 Construction Mirvac Limited and its wholly-owned Australian controlled Contracts which covers construction contracts. entities have implemented the tax consolidation legislation. The new standard is based on the principle that revenue is The head entity, Mirvac Limited, and the controlled entities in the recognised when control of a good or service is transferred tax consolidated group continue to account for their own current to a customer so the notion of control replaces the existing and deferred tax amounts. These tax amounts are measured notion of risks and rewards. The standard will have no impact as if each entity in the tax consolidated group continues to on revenue recognition within the Investment segment, as the be a stand-alone taxpayer in its own right. In addition to its revenue is accounted for under AASB 117 Leases. With respect own current and deferred tax amounts, Mirvac Limited also to the residential development business, the standard is unlikely recognises the current tax liabilities (or assets) and the deferred to have a material impact as the performance obligation is the tax assets arising from unused tax losses and unused tax credits delivering of the completed product. The Group is in the process assumed from controlled entities in the tax consolidated group. of assessing any implications for other segments of the business Assets or liabilities arising under tax funding agreements and is evaluating for an early adoption of the new standard. within the tax consolidated group are recognised as amounts receivable from or payable to other entities in the Group. Details This standard must be applied for financial years commencing about the tax funding agreement are disclosed in note 4(d). on or after 1 January 2017. Any difference between the amounts assumed and amounts There are no other standards and interpretations that are not receivable or payable under the tax funding agreement yet effective and that are expected to have a material impact is recognised as a contribution to (or distribution from) on the entity in the current or future reporting periods and on wholly‑owned tax consolidated entities. Under the current foreseeable future transactions. income tax legislation, MPT is not liable for income tax, provided its taxable income is fully distributed to unitholders each year. 31 Critical accounting judgements and estimates Judgements and estimates are continually evaluated, based on iii) Financial guarantees historical experience and other factors, including expectations Where the parent entity has provided financial guarantees in of future events that may have a financial impact and are relation to loans and payables of controlled entities or JVA believed to be reasonable under the circumstances. for no compensation, the fair values of these guarantees are a) Critical judgements in applying Mirvac’s accounting policies accounted for as contributions and recognised as part of the cost of the investment. The following are the critical judgements that management has made in the process of applying the Group’s accounting aa) New standards and interpretations not yet adopted policies and that have the most significant effect on the Certain new accounting standards and interpretations have amounts recognised in the consolidated financial statements: been published that are not mandatory for 30 June 2015 i) Revenue recognition reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new The measurement of development revenue, which is recognised standards and interpretations is set out below: when the significant risks and rewards of ownership are transferred to the purchaser, requires management to exercise i) AASB 9 Financial Instruments its judgement in setting selling prices, given due consideration This standard addresses the classification, measurement and to cost inputs and market conditions. The measurement of derecognition of financial assets and financial liabilities and construction revenue, which is recognised upon construction introduces new rules for hedge accounting. In December 2014, contracts on a percentage of completion basis, requires an the AASB made further changes to the classification and estimate of expenses incurred to date as a percentage of total measurement rules and also introduced a new impairment estimated costs. model. These latest amendments now complete the new ii) Cost of goods sold financial instruments standard. Inventories are expensed as cost of goods sold upon The Group no longer expects any impact from the new sale. Management uses its judgement in determining the classification, measurement and derecognition rules on the apportionment of cost of goods sold, through either unit Group’s financial assets and financial liabilities. There will be no entitlement or percentage of revenue, the quantum of cost impact on the Group’s accounting for financial assets as they are of goods sold, which includes both costs incurred to date and all currently recognised in the consolidated SoCI. There will also forecast final costs, and the nature of cost of goods sold, which be no impact on the Group’s accounting for financial liabilities, may include acquisition costs, development costs, borrowing as the new requirements only affect the accounting for financial costs and those costs incurred in bringing the inventories to liabilities that are designated at fair value through profit or loss a saleable state. and the Group does not have any such liabilities. iii) Provision for loss on inventories As a general rule, it will be easier to apply hedge accounting Mirvac is required to carry inventories at the lower of cost and going forward as the standard introduces a more principles NRV. Through the use of project feasibility assessments, which based approach. The new standard also introduces expanded are based on the most reliable evidence available at the time, disclosure requirements and changes in the presentation. and incorporate both quantitative and qualitative factors, such The new impairment model is an expected credit loss model as estimated selling rates and costs to complete, judgement is which may result in the earlier recognition of credit losses. made concerning estimated NRV, which, in some cases, have The Group has not yet decided when to adopt AASB 9. resulted in the establishment of a provision. This standard must be applied for financial years commencing iv) Investment properties and OOP on or after 1 January 2018. Mirvac is required to make a judgement to determine whether a property qualifies as an investment property or PPE in the cases where part of the building is occupied by the Group. Each property is considered individually. Where more than 10 per cent of the lettable area is occupied by the Group, the property is normally treated as OOP and accounted for as part of PPE.

94 MIRVAC GROUP ANNUAL REPORT 2015 31 Critical accounting judgements and estimates / iii) Estimated impairment of investments accounted for continued using the equity method v) Fair value estimation The investments are tested for impairment, by comparing Where financial assets and liabilities are carried at fair value, the recoverable amounts (higher of value in use, and fair value less fair value is based on assumptions of future events and involves costs to sell) with the carrying amounts, whenever there is an significant estimates. The basis of valuation is set out in note 15. indication that the investment may be impaired. In determining the value in use of the investment, Mirvac estimates the present vi) SBP transactions value of the estimated future cash flows expected to arise The Group measures the cost of equity settled securities from distributions to be received from the investment and allocated to employees by reference to the fair value of the from its ultimate disposal. Details of the assumptions used by equity instruments at the date at which they are granted. management in assessing the impairment are provided in note 16. As explained in note 25, the fair value is determined by an external valuer using the bionomial simulation pricing method; iv) Fair value of investments not traded in active markets this method includes a number of judgements and assumptions. The fair value of investments not traded in an active market is These judgements and assumptions relating to SBP would have determined by the unit price as advised by the fund manager. no impact on the carrying amounts of assets and liabilities in The unit price is determined by NPV calculations using future the consolidated SoFP but may impact the SBP expense taken cash flows and an appropriate post-tax discount rate (refer to to profit or loss and equity. note 15). The carrying value of investments not traded in an active market determined using the above techniques and assumptions vii) Recognition of deferred tax assets is $11.3m (2014: $11.8m) and is disclosed as other financial assets The recognition of deferred tax assets is based upon whether at fair value through profit or loss (refer to note 13.2). it is probable that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary v) Valuation of investment properties and OOP differences can be deducted. To determine the future taxable Mirvac uses judgement in respect of the fair values of profits, reference is made to the latest available profit forecasts. investment properties and OOP. Investment properties and Judgement is also required in assessing whether deferred tax OOP are revalued by external valuers on a rotation basis assets and certain deferred tax liabilities are recognised on the with approximately one-half of the portfolio being valued consolidated SoFP. Deferred tax assets, including those arising annually. Investment properties which are not subject to an from tax losses, capital losses and temporary differences, are external valuation at the end of the reporting period are fair recognised only when it is considered probable that they will valued internally by management. The assumptions used in be recovered. Recoverability is dependent on the generation the estimations of fair values include expected future market of sufficient future taxable profits. rentals, discount rates, market prices and economic conditions. The reported fair values of investment properties and OOP viii) Classification of investments in structured entities reflect the market conditions at the end of the reporting as an associate/joint venture period. While this represents the best estimation of fair value Mirvac holds 60 per cent of the overall investment within ASFI. at the reporting date, actual sale prices achieved (should the Mirvac equity accounts for this investment as a joint venture investment properties and OOP be sold) may be higher or lower even though it owns 60 per cent of the voting or potential than the most recent valuation. This is particularly relevant in voting power, due to the fact that major decisions affecting the periods of market illiquidity or uncertainty. Major assumptions joint venture require unanimous approval from each investor in used in valuation of investment properties are disclosed in note the joint venture. 6. The carrying value at the end of the reporting period for investment properties was $6,751.1m (2014: $6,016.4m) and OOP b) Key sources of estimation uncertainty $244.3m (2014: $238.6m). Details on investment properties are In preparing the consolidated financial statements, management provided in note 6 and OOP in note 8. is required to make estimations and assumptions. The following are the key assumptions concerning the future, and other key vi) Valuation of IPUC sources of estimation uncertainty at the end of the reporting IPUC are valued at fair value. There are generally no active period, that have a significant risk of causing material adjustment markets for IPUC and fair value is considered to be the to the carrying amounts of assets and liabilities within the estimated market price that would be paid for the partially next year: completed property, reflecting the expectations of market participants of the value of the property when complete less i) Inventories deductions for the estimated costs to complete, with appropriate The NRV of inventories is the estimated selling price in adjustments for risk and profit. The fair value is determined the ordinary course of business less estimated costs of on the basis of either DCF or residual methods. Both methods completion and costs to sell. Such estimates take into require consideration of the project risks which are relevant consideration fluctuations of price or cost directly relating to the development process, including but not limited to to events occurring after the end of the period to the extent construction and letting risks. The estimated value of future that such events confirm conditions existing at the end of assets is based on the expected future income from the project, the reporting period. The key assumptions require the use using current yields of similar completed properties. The net of management judgement and are reviewed quarterly. gain on fair value of IPUC was $2.8m (2014: loss of $7.7m). During the year, Mirvac did not expense any amount (2014: $nil) The carrying value of $188.9m (2014: $126.0m) at the end of the in relation to inventories that were carried in excess of the NRV. year was included in investment properties (refer to note 6). ii) Impairment of goodwill vii) Valuation of SBP transactions Mirvac annually tests whether goodwill has suffered any Valuation of SBP transactions is performed using judgements impairment. Determining whether goodwill is impaired requires around the fair value of the equity instruments on the date an estimation of the value in use of the CGUs to which goodwill at which they are granted. The fair value is determined using a has been allocated. The value in use calculation requires the Monte-Carlo simulation. Mirvac recognises a SBP over the vesting entity to estimate the future cash flows expected to arise from period which is based on the estimation of the number of equity each CGU and a suitable discount rate in order to calculate the instruments likely to vest. At the end of the vesting period, net present value (“NPV”). The carrying amount of goodwill at Mirvac will assess the total expense recognised in comparison the end of the reporting period was $36.4m (2014: $36.4m). to the number of equity instruments that ultimately vested. There was no impairment loss recognised during the year (2014: $24.5m). Details on the assumptions used are provided in note 11.2.

MIRVAC GROUP ANNUAL REPORT 2015 95 Notes to the consolidated financial statements

31 Critical accounting judgements and estimates / continued viii) Valuation of derivatives and other financial instruments Mirvac uses judgement in selecting the appropriate valuation technique for financial instruments not quoted in an active market. Valuation of derivative financial instruments involves assumptions based on quoted market rates adjusted for specific features of the instrument. The valuations of any financial instrument may change in the event of market volatility. The valuation techniques are discussed in detail at note 15 and have been developed in compliance with requirements of AASB 139 Financial Instruments: Recognition and Measurement. ix) Estimated future taxable profits Mirvac prepares financial budgets and forecasts on a regular basis which are reviewed, covering a five year period. Budgets and forecasts are prepared on a base case and identified new projects. These forecasts and budgets form the basis of future profitability to support the carrying of the deferred tax asset. Mirvac’s operating and financial performance is influenced by a variety of general economic and business conditions, which are outside the control of Mirvac, including the level of inflation, interest rates, exchange rates, commodity prices, ability to access funding, oversupply and demand conditions and government fiscal, monetary and regulatory policies. A change in any of the assumptions used in the budgeting and forecasting would have an impact on the future profitability of the Group. For example, adverse fluctuations in interest rates, to the extent that they are not hedged or forecast, may impact Mirvac’s earnings and asset values due to any impact on property markets in which Mirvac operates.

96 MIRVAC GROUP ANNUAL REPORT 2015 Directors’ declaration

In the Directors’ opinion: a) the financial statements and the notes set out on pages 32 to 96 are in accordance with theCorporations Act 2001, including: i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and ii) giving a true and fair view of the consolidated entity’s financial position at 30 June 2015 and of its performance for the financial year ended on that date; b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 17 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 17. The basis of preparation note confirms that the financial statements also comply with IFRS as issued by the IASB. The Directors have been given the declarations by the CEO & Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors.

Susan Lloyd-Hurwitz Director Sydney 13 August 2015

MIRVAC GROUP ANNUAL REPORT 2015 97 Independent auditor’s report to the members of Mirvac Limited

Report on the financial report We have audited the accompanying financial report of Mirvac Limited (the Company), which comprises the consolidated statement of financial position as at 30 June 2015, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for the Company. The consolidated entity comprises the Company and the entities it controlled at year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. In the basis of preparation note, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation

98 MIRVAC GROUP ANNUAL REPORT 2015 Independent auditor’s report to the members of Mirvac Limited (continued)

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion In our opinion: a) the financial report of the Company is in accordance with theCorporations Act 2001, including: i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001. b) the financial report also complies with International Financial Reporting Standards as disclosed in the basis of preparation note. Report on the Remuneration Report We have audited the Remuneration Report included on pages 11 to 29 of the Directors’ Report for the year ended 30 June 2015. The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s opinion In our opinion, the Remuneration Report of the Company for the year ended 30 June 2015, complies with section 300A of the Corporations Act 2001.

PricewaterhouseCoopers

Matthew Lunn Sydney Partner 13 August 2015

MIRVAC GROUP ANNUAL REPORT 2015 99 Securityholder information

The information set out below was prepared at 31 July 2015 and applies to Mirvac’s stapled securities (ASX code: MGR). As at 31 July 2015, there were 3,698,653,645 stapled securities on issue. Substantial securityholders As disclosed in substantial holding notices lodged with the ASX at 31 July 2015: Number of Percentage of Name Date of change stapled securities issued equity % 1

AMP Limited and its related bodies corporate 29/04/2015 381,806,702 10.33 BlackRock Group 25/11/2014 270,946,137 7.32 The Vanguard Group, Inc 02/06/2015 268,948,574 7.27 State Street Corporation and subsidiaries 08/05/2015 202,399,711 5.47 Commonwealth Bank of Australia Group 15/07/2015 185,022,971 5.00 1) Percentage of issued equity held as at the date notice provided. Range of securityholders Range Number of holders Number of stapled securities

1 to 1,000 6,437 3,034,004 1,001 to 5,000 11,451 31,726,392 5,001 to 10,000 6,146 45,068,972 10,001 to 100,000 7,524 179,531,480 100,001 and over 340 3,439,292,797 Total number of securityholders 31,898 3,698,653,465

20 largest securityholders Name Number of stapled securities Percentage of issued equity %

HSBC Custody Nominees (Australia) Limited 1,180,719,360 31.92 JP Morgan Nominees Australia Limited 780,912,008 21.11 National Nominees Limited 579,700,651 15.67 BNP Paribas Noms Pty Ltd 260,720,477 7.05 Citicorp Nominees Pty Limited 257,652,281 6.97 AMP Life Limited 90,035,344 2.43 Citicorp Nominees Pty Limited 64,515,422 1.74 RBC Investor Services Australia Nominees Pty Limited 18,333,881 0.50 RBC Investor Services Australia Nominees Pty Limited 11,916,978 0.32 BNP Paribas Noms (NZ) Ltd 10,081,426 0.27 Bond Street Custodians Limited 9,961,780 0.27 RBC Investor Services Australia Nominees Pty Limited 8,619,926 0.23 SBN Nominees Pty Limited <10004 ACCOUNT> 8,600,000 0.23 Argo Investments Limited 6,000,551 0.16 BNP Paribas Nominees Pty Ltd 5,418,854 0.15 UBS Wealth Management Australia Nominees Pty Ltd 5,136,101 0.14 Invia Custodian Pty Limited 4,376,284 0.12 Yalaba Pty Ltd 4,331,876 0.12 National Nominees Limited 4,018,000 0.11 BNP Paribas Nominees Pty Ltd 3,855,000 0.10 Total for 20 largest securityholders 3,314,906,200 89.62 Total other securityholders 383,747,445 10.38 Total stapled securities on issue 3,698,653,645 100.00

Number of securityholders holding less than a marketable parcel (being 265 stapled securities at the closing market price of $1.890 on 31 July 2015): 2,048. Voting rights Subject to the Constitutions of Mirvac Limited and of MPT and to any rights or restrictions for the time being attached to any class or classes of shares, units or stapled securities: — on a show of hands, each Member present in person or by proxy, attorney, or representative has one vote; and — on a poll, each Member has: > in the case of a resolution of Mirvac Limited, one vote for each share in Mirvac Limited held; and > in the case of a resolution of MPT, one vote for each whole $1.00 of unit value in MPT held.

100 MIRVAC GROUP ANNUAL REPORT 2015 Glossary of acronyms

AAS Australian Accounting Standards MTN Medium term notes AASB Australian Accounting Standards Board NAB National Australia Bank Limited AFSL Australian financial services licence NABERS National Australian Built Environment Rating System AGM Annual General and General Meeting NCI Non-controlling interests ANZ Australia and New Zealand Banking Group Limited NED Non-Executive Director ARCC Audit, Risk and Compliance Committee NPV Net present value A-REIT Australian Real Estate Investment Trust NRV Net realisable value ARR Asset revaluation reserve NTA Net tangible assets ARSN Australian Registered Scheme Number OOP Owner-occupied properties ASFI Australian Sustainable Forestry Investors 1&2 PPE Property, plant and equipment ASIC Australian Securities and Investments Commission PwC PricewaterhouseCoopers ASX Australian Securities Exchange ROE Return on equity CEO/MD Chief Executive Officer & Managing Director ROIC Return on invested capital CFO Chief Financial Officer SBP Security based payments CGU Cash generating unit SoCI Statement of comprehensive income CPI Consumer Price Index SoFP Statement of financial position CPSS Cents per stapled security STI Short term incentives CR Capitalisation rate TSR Total securityholder return DCF Discounted cash flow WALE Weighted average lease expiry DRP Dividend/distribution reinvestment plan EEP Employee Exemption Plan EIP Executive Incentive Program EIS Employee Incentive Scheme ELT Executive Leadership Team EPS Earnings per stapled security ERP Executive Retention Plan EY Ernst & Young FBT Fringe benefits tax FX Foreign Exchange FY10 Year ended 30 June 2010 FY11 Year ended 30 June 2011 FY12 Year ended 30 June 2012 FY13 Year ended 30 June 2013 FY14 Year ended 30 June 2014 FY15 Year ended 30 June 2015 FY16 Year ended 30 June 2016 FY17 Year ended 30 June 2017 GST Goods and services tax HRC Human Resources Committee HSE&S Health, safety, environment and sustainability IASB International Accounting Standards Board IFRS International Financial Reporting Standards IPUC Investment properties under construction JVA Joint ventures and associates KMP Key management personnel KPI Key performance indicators LSL Long service leave LTI Long term incentives LTIP Long Term Incentive Plan LTP Long Term Performance Plan MAM Mirvac Asset Management MGR Mirvac Group (and ASX code) MIM Mirvac Investment Management MPT Mirvac Property Trust

MIRVAC GROUP ANNUAL REPORT 2015 101 Directory

Registered office/Principal office Mirvac Group (comprising Mirvac Limited ABN 92 003 280 699 and Mirvac Funds Limited ABN 70 002 561 640, AFSL 233 121 as responsible entity of MPT ARSN 086 780 645) Level 26 60 Margaret Street Sydney NSW 2000 Telephone +61 2 9080 8000 Facsimile +61 2 9080 8111 www.mirvac.com Securities exchange listing Mirvac is listed on the Australian Securities Exchange (ASX code: MGR). Directors John Mulcahy (Chair) Susan Lloyd-Hurwitz (CEO/MD) Christine Bartlett Peter Hawkins Samantha Mostyn James M. Millar AM John Peters Elana Rubin Company Secretary Sean Ward Stapled security registry Link Market Services Limited 1A Homebush Bay Drive Rhodes NSW 2138 Telephone +61 1800 356 444 Securityholder enquiries Telephone +61 1800 356 444 Correspondence should be sent to: Mirvac Group C/- Link Market Services Limited Locked Bag 14 Sydney South NSW 1235. Further investor information can be located in the Investor Centre tab on Mirvac’s website at www.mirvac.com. Auditor PricewaterhouseCoopers 201 Sussex Street Sydney NSW 2000 Annual General and General Meeting Mirvac Group’s 2015 AGM will be held at 10.00am (Australian Eastern Standard Time) on Thursday, 12 November 2015 at the Pullman Brisbane, King George Square, Corner Ann and Roma Streets, Brisbane QLD 4000.

102 MIRVAC GROUP ANNUAL REPORT 2015